After experiencing an unbelievable banana republic moment, why would any justice subject themselves to that theatre?
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Supreme Court Justice Samuel Alito made headlines back in January when he mouthed some mild disapproval during President Barack Obama's State of the Union Address as Obama made false statements about the Court's landmark free speech ruling in Citizens United v. F.E.C. Speaking in New York last week, Alito made it clear he won't be sitting through another such presidential performance.
http://reason.com/blog/2010/10/18/shocking-news-of-the-century-j
Tuesday, October 19, 2010
Monday, October 11, 2010
Mankiw on Taxing the "Rich" (Himself)
Mankiw shows how increasing taxes on himself changes his incentives.
He did not even factor in inflation!
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And I acknowledge that my motives in taking on extra work are partly mercenary. I don’t want to move to a bigger house or buy that Ferrari, but I hope to put some money aside for my three children. They will never lead lives of leisure, but I hope they won’t have to struggle to find down payments to buy their own homes or to send their kids to college.
Suppose that some editor offered me $1,000 to write an article. If there were no taxes of any kind, this $1,000 of income would translate into $1,000 in extra saving. If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now, when I pass on, my children would inherit about $10,000. That is simply the miracle of compounding.
Now let’s put taxes into the calculus. First, assuming that the Bush tax cuts expire, I would pay 39.6 percent in federal income taxes on that extra income. Beyond that, the phaseout of deductions adds 1.2 percentage points to my effective marginal tax rate. I also pay Medicare tax, which the recent health care bill is raising to 3.8 percent, starting in 2013. And in Massachusetts, I pay 5.3 percent in state income taxes, part of which I get back as a federal deduction. Putting all those taxes together, that $1,000 of pretax income becomes only $523 of saving.
And that saving no longer earns 8 percent. First, the corporation in which I have invested pays a 35 percent corporate tax on its earnings. So I get only 5.2 percent in dividends and capital gains. Then, on that income, I pay taxes at the federal and state level. As a result, I earn about 4 percent after taxes, and the $523 in saving grows to $1,700 after 30 years.
Then, when my children inherit the money, the estate tax will kick in. The marginal estate tax rate is scheduled to go as high as 55 percent next year, but Congress may reduce it a bit. Most likely, when that $1,700 enters my estate, my kids will get, at most, $1,000 of it.
HERE’S the bottom line: Without any taxes, accepting that editor’s assignment would have yielded my children an extra $10,000. With taxes, it yields only $1,000. In effect, once the entire tax system is taken into account, my family’s marginal tax rate is about 90 percent. Is it any wonder that I turn down most of the money-making opportunities I am offered?
By contrast, without the tax increases advocated by the Obama administration, the numbers would look quite different. I would face a lower income tax rate, a lower Medicare tax rate, and no deduction phaseout or estate tax. Taking that writing assignment would yield my kids about $2,000. I would have twice the incentive to keep working.
http://www.nytimes.com/2010/10/10/business/economy/10view.html?_r=3&ref=business
He did not even factor in inflation!
------------------------------------
And I acknowledge that my motives in taking on extra work are partly mercenary. I don’t want to move to a bigger house or buy that Ferrari, but I hope to put some money aside for my three children. They will never lead lives of leisure, but I hope they won’t have to struggle to find down payments to buy their own homes or to send their kids to college.
Suppose that some editor offered me $1,000 to write an article. If there were no taxes of any kind, this $1,000 of income would translate into $1,000 in extra saving. If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now, when I pass on, my children would inherit about $10,000. That is simply the miracle of compounding.
Now let’s put taxes into the calculus. First, assuming that the Bush tax cuts expire, I would pay 39.6 percent in federal income taxes on that extra income. Beyond that, the phaseout of deductions adds 1.2 percentage points to my effective marginal tax rate. I also pay Medicare tax, which the recent health care bill is raising to 3.8 percent, starting in 2013. And in Massachusetts, I pay 5.3 percent in state income taxes, part of which I get back as a federal deduction. Putting all those taxes together, that $1,000 of pretax income becomes only $523 of saving.
And that saving no longer earns 8 percent. First, the corporation in which I have invested pays a 35 percent corporate tax on its earnings. So I get only 5.2 percent in dividends and capital gains. Then, on that income, I pay taxes at the federal and state level. As a result, I earn about 4 percent after taxes, and the $523 in saving grows to $1,700 after 30 years.
Then, when my children inherit the money, the estate tax will kick in. The marginal estate tax rate is scheduled to go as high as 55 percent next year, but Congress may reduce it a bit. Most likely, when that $1,700 enters my estate, my kids will get, at most, $1,000 of it.
HERE’S the bottom line: Without any taxes, accepting that editor’s assignment would have yielded my children an extra $10,000. With taxes, it yields only $1,000. In effect, once the entire tax system is taken into account, my family’s marginal tax rate is about 90 percent. Is it any wonder that I turn down most of the money-making opportunities I am offered?
By contrast, without the tax increases advocated by the Obama administration, the numbers would look quite different. I would face a lower income tax rate, a lower Medicare tax rate, and no deduction phaseout or estate tax. Taking that writing assignment would yield my kids about $2,000. I would have twice the incentive to keep working.
http://www.nytimes.com/2010/10/10/business/economy/10view.html?_r=3&ref=business
Italy's Youth Exodus
Much of Europe, and especially Italy, has a huge exodus problem.
It simply does not pay to be young and educated when the inbred corporate state picks all winners and losers, the employed and unemployed.
The big problem is we are becoming more like them by the day. Will our youth have opportunity here, or will we saddle them with the back-breaking obligations of entitlements for the "me generation" baby-boomers? Beyond our own, will the best and brightest from other countries still come here? Will we even let them in? At the margins, I sense we are already losing this battle. Sadly, in the worst case, I hope there will at least be a land of opportunity somewhere for our youth to go to.
-------------------------------------------------
It simply does not pay to be young and educated when the inbred corporate state picks all winners and losers, the employed and unemployed.
The big problem is we are becoming more like them by the day. Will our youth have opportunity here, or will we saddle them with the back-breaking obligations of entitlements for the "me generation" baby-boomers? Beyond our own, will the best and brightest from other countries still come here? Will we even let them in? At the margins, I sense we are already losing this battle. Sadly, in the worst case, I hope there will at least be a land of opportunity somewhere for our youth to go to.
-------------------------------------------------
Wednesday, October 6, 2010
The Individual Mandate and Raich
Interesting position on why the Raich case may not form a solid precedent supporting the Individual Mandate.
Basically, as I like to say, it is a "breath tax". Are you breathing? Ok, then, you owe the tax. Nothing is produced, no goods or services change hands. It is a tax on economic inactivity.
Well, I suppose since breathing emits CO2, maybe that should be regulated.
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I. The Court’s Definition of “Economic Activity.”
The Raich Court’s definition of economic activity is extremely broad, even ridiculously so. For example, it gives Congress the power to regulate your decision to eat dinner at home, since that decision entails the “consumption” of commodities such as food. Expansive as this definition may be, the mere status of being uninsured doesn’t qualify. Choosing not to purchase health insurance involves neither production, nor distribution, nor consumption of commodities. Indeed, an individual who chooses not to purchase insurance has chosen not to consume or distribute the commodity in question. And, obviously, he or she is also not “producing” any commodity by refusing to purchase insurance. By contrast, the Raich defendants were engaged in “economic activity” since they were both producing and consuming marijuana.
II. The Broader Regulatory Scheme Rule.
This rule too is very broad in the way it allows Congress to regulate even “noneconomic” activity so long as there is even a remote connection to some sort of regulation of commerce. However, the power outlined by the court applies only to the regulation of “activity.” The Court itself repeatedly uses the term “activity” to describe the object of regulation. It does not cover regulation of inactivity or the refusal to engage in economic transactions. Angel Raich and Diane Monsen had not been inactive or merely refused to engage in some transaction. To the contrary, they were actively involved in the production and consumption of homegrown medical marijuana. The Court’s logic could be extended to cover regulation of inactivity. But Raich itself doesn’t do this.
http://volokh.com/2010/10/05/gonzales-v-raich-and-the-individual-mandate/
Basically, as I like to say, it is a "breath tax". Are you breathing? Ok, then, you owe the tax. Nothing is produced, no goods or services change hands. It is a tax on economic inactivity.
Well, I suppose since breathing emits CO2, maybe that should be regulated.
-----------------------------------------------------------------------------
I. The Court’s Definition of “Economic Activity.”
The Raich Court’s definition of economic activity is extremely broad, even ridiculously so. For example, it gives Congress the power to regulate your decision to eat dinner at home, since that decision entails the “consumption” of commodities such as food. Expansive as this definition may be, the mere status of being uninsured doesn’t qualify. Choosing not to purchase health insurance involves neither production, nor distribution, nor consumption of commodities. Indeed, an individual who chooses not to purchase insurance has chosen not to consume or distribute the commodity in question. And, obviously, he or she is also not “producing” any commodity by refusing to purchase insurance. By contrast, the Raich defendants were engaged in “economic activity” since they were both producing and consuming marijuana.
II. The Broader Regulatory Scheme Rule.
This rule too is very broad in the way it allows Congress to regulate even “noneconomic” activity so long as there is even a remote connection to some sort of regulation of commerce. However, the power outlined by the court applies only to the regulation of “activity.” The Court itself repeatedly uses the term “activity” to describe the object of regulation. It does not cover regulation of inactivity or the refusal to engage in economic transactions. Angel Raich and Diane Monsen had not been inactive or merely refused to engage in some transaction. To the contrary, they were actively involved in the production and consumption of homegrown medical marijuana. The Court’s logic could be extended to cover regulation of inactivity. But Raich itself doesn’t do this.
http://volokh.com/2010/10/05/gonzales-v-raich-and-the-individual-mandate/
Monday, October 4, 2010
Is Barney in trouble?
Somehow, I am stuck in Barney's tortuously gerrymandered district. Common sense would say you cannot lose to Barney Frank;
1) Clearly one of the chief architects of the financial meltdown.
2) Former boyfriend of the Fannie Mae executive running the disastrous affordable housing initiatives.
3) Recipient of campaign cash from Fannie and Freddie
4) The Dodd-Frank bill; the patients running the asylum
I could go on, but I mean seriously- what does it take?!?
http://www.sfexaminer.com/politics/A-GOP-unknown-is-in-striking-range-of-Barney-Frank-1063388-104114343.html
1) Clearly one of the chief architects of the financial meltdown.
2) Former boyfriend of the Fannie Mae executive running the disastrous affordable housing initiatives.
3) Recipient of campaign cash from Fannie and Freddie
4) The Dodd-Frank bill; the patients running the asylum
I could go on, but I mean seriously- what does it take?!?
http://www.sfexaminer.com/politics/A-GOP-unknown-is-in-striking-range-of-Barney-Frank-1063388-104114343.html
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