Thursday, January 8, 2009

Does Andrew Sullivan Think State and Local Government Don’t Tax Us?

If Andrew Sullivan knows that that state and local governments do tax us – then why is he touting certain silliness from Greg Mankiw?:

These figures include all federal taxes, not just income taxes.

Also excluded from these effective tax rate calculations are the deferred taxes being piled up by those Bush deficits that I’m sure Sulli knows about.


TheTrucker said...

This is a game the protectorate of the rich play constantly. Heritage and Cato are the primaries, but various rightarded blogs participate fully.

Bill Gates if worth $57B and if you audit his returns for the last 20 years and compute his tax rate you will find it derisory. The point is that rich is defined in assets and not in income. Even then I will note that in 2008 (aside from the AMT which I have not yet looked at) You could have income 0f 10 billion and not pay a dime in income tax. This is so because the rate applied to capital gains is computed from earned income only (or it certainly appears to be from looking at the forms). As of 2008 there is a zero bracket for capital gains. And capital gains taxes apply only to realized gains. So it is possible to be very very rich and not pay any income taxes at all.

The tax paid has no real connection to the amount of net worth; the amount of wealth. And it certainly has no correlation to the benefits received. The world wide policeman (military budget) prevents the Chinese from simply copying MS software and selling it all over the world for $5 and making a killing.

The latter day school of neoclassical economics in involved in this subterfuge to the hilt:

The Corruption of Economics

rdan said...

Good grief pgl. Mankiw has stopped analyzing, but why should Sullivan?? The information is in the tables for context and thoughtful comment...stay on it and thanks.

Shag from Brookline said...

Mankiw on analyzing:

"No, thank you."

And as to Trucker's statement:

"And capital gains taxes apply only to realized gains."

In addition to "realized" they apply only if "recognized" as the IRC does not recognize certain realized gains.