Mabe I missed it,” Richard Haass, the president of the Council on Foreign Relations, said in a tweet on Friday morning, “but we just had an entire #GOPDebate on economics and #TPP was never mentioned.”
.. Rather than focussing on topics like these, the ten candidates spent much of their time attacking CNBC’s moderators (my colleague Amy Davidson has more on this) and competing with each other over who could offer Americans the lowest tax rates.
.. It was left to John Kasich, the governor of Ohio, who is seeking to position himself as the voice of sanity in the asylum, to state the obvious: “You know, these plans would put us trillions and trillions of dollars in debt…. Why don’t we just give a chicken in every pot, while we’re, you know, coming up—coming up with these fantasy tax schemes.”
.. The first problem the candidates face is that the field is still too crowded. Like Wall Street analysts (and media commentators), they therefore have an incentive to adopt extreme positions, because outliers get noticed.
Ben Carson’s Economist Seeks Tax System Overhaul
There’s an inherent contradiction here, of course. According to the Tax Policy Center, the average federal tax rate for households making between $500,000 and $1 million is 28.1 percent, about double the rate in Carson’s plan, while the average rate for households under $40,000 is below 10 percent.
Marco Rubio’s Puppies-and-Rainbows Tax Plan
Since Oprah is a real person with no actual involvement in this proposal, it’s better to describe the Rubio-Lee proposal as the Puppies and Rainbows Tax Plan. After all, it’s full of things everybody likes, at least on the Republican side: family tax cuts that will make it easier to buy the children a puppy, and capital tax cuts that chase a pot of capital investment gold at the end of the rainbow.
.. Even if those preventive measures work, they will still highlight a central feature of the Rubio-Lee plan: It aims to treat business income more favorably than labor income, while most families derive most of their income from labor, not business.
The Self-Destruction of the 1 Percent
The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness.
.. In the 1950s, the marginal income tax rate for those at the top of the distribution soared above 90 percent, a figure that today makes even Democrats flinch. Meanwhile, of the 400 richest taxpayers in 2009, 6 paid no federal income tax at all, and 27 paid 10 percent or less. None paid more than 35 percent.
.. The first is to channel the state’s scarce resources in their own direction. This is the absurdity of Mitt Romney’s comment about the “47 percent” who are “dependent upon government.” The reality is that it is those at the top, particularly the tippy-top, of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.
Exhibit A is the bipartisan, $700 billion rescue of Wall Street in 2008. Exhibit B is the crony recovery. The economists Emmanuel Saez and Thomas Piketty found that 93 percent of the income gains from the 2009-10 recovery went to the top 1 percent of taxpayers. The top 0.01 percent captured 37 percent of these additional earnings, gaining an average of $4.2 million per household.
.. “Most lobbying is pro-business, in the sense that it promotes the interests of existing businesses, not pro-marketin the sense of fostering truly free and open competition.
.. For Jefferson, this equality was at the heart of American exceptionalism: