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Quote of the Week

We are in danger of having a tax system that leaves high incomes relatively free of taxation”

That is Nobel Prize winning economist James Tobin … in 1997 from an interview in the book, Reflections on the Great Depression.

Here is some information on the tax share paid by the rich from the Tax Foundation (e.g. “richest” 5% of households pay over 40.3% of all federal taxes). Here is data on who pays the income tax by income class from the National Taxpayers Union (e.g. “richest” 5% of income earners pay over 58% of all income taxes).

I wonder what “relatively unfree” of taxation would mean.

§ He cites idea that natural rate of unemployment seems to be rising regularly in Germany and France … but asks, How can that be because of welfare state… has it grown that much over time?

§ My ANSWER? PSYCHOLOGY can increase impact of welfare state over time … benefits to American unwed mothers did not raise each year from 1975 to today, but that does not mean that the welfare programs are not responsible for a large share of the increase in out-of-wedlock births!

5 Responses to “Quote of the Week”

  1. Speedmaster says:

    I am both amazed and frustrated when I continue to hear people talk about so-called “tax cuts for the rich” and discuss how the rich allegedly don’t pay their fair share. Do these people not see these numbers? Can they not understand them?! A little more: http://bit.ly/eWNayI

  2. mg says:

    You don’t know Mongolians, you don’t know about history of the country, you don’t know about their lifestyle, and you have never been there. You won’t be there never!….
    You don’t even need to include them in your scratches..Just watch your mouth!
    You don’t need to know whether or not Mongolians are prominent people!
    If you really need to see the one, then just take care of yourself, or kids if you have…

  3. Harry says:

    And the above does not take into account all the money invested in municipal bonds (non-AMT). California’s used to be rated Aaa/AAA, without insurance.

  4. Rod says:

    Ayn Rand was a wordy and sentimental novelist, but she hit on a simple truth that Art Laffer would agree with: there’s a point where the burdens of taxation just become too much to make hard work and productivity worth it. Who can even argue against that?

    So now we have the spectacle in Wisconsin of unions demanding that the legislature balance their budget by soaking the rich. They actually said that: “Soak the rich.” Maybe Al Franken can make a joke out of this.

  5. JJ says:

    This post is data obscurity pure & simple.

    The rates of taxation on individual incomes in the US relative to that in other advanced economies is ….? And, if we wanted to think about the distributive matters you raise, what about income and wealth distribution? And the trajectory in those distributive numbers over the past three decades has been? Come on … even an economist can do better than this!

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