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September 06, 2006

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SteveMG

Theory of conspicuous, er, contemption?

Well, on first blush one asks how exactly will raising their taxes reduce their spiteful dislike of the poor?

And even if raising taxes removed this spite and, in turn, lessened their consumption, would that be a good idea?

Third, why am I responding to this goofy argument?

SMG

Paul Zrimsek

If we keep needling DeLong enough we may get an account of what drove a utilitarian to write this:

Surely spite is at least as offensive an other-regarding preference as envy, isn't it? Surely public policy should weigh the spite-generated utility the rich gain from their conspicuous consumption as worth less than nothing, shouldn't it?
Bob

They should ask the spiteful Kennedy's why they keep all of their trust fund money off shore... Let's get Fat Ted to pay his fair share first!

doug deeper

Brad's idea sounds like a microcosm of what the UN wants to do on a global level.

One word - communism.

proreive .

'inequality is to make the tax system more progressive, not less. A reality-based government would'

Sounds like Blair's and his Live8 - G8 GDP tax that he doubled the day after the London bombings.

Larry

A national sales tax would be a step in the right direction. The rich would pay more taxes and everyone would be happy?

steve sturm

DeLong proves that liberals just want higher taxes and are desperately searching for some rationale to justify their own bias... a twist off the 'sentence first, verdict afterwards'... and their continuing lack of success drives them to endorse such stupidity as what DeLong is doing.

And why would the rich spend in order to spite the poor, when the rich would just as soon not have anything to do with the poor? It's not as if the millionaires are driving through the inner city slums so the poor can see the fancy car the rich are driving, nor are the rich inviting the poor out to the Hamptons so they can watch the rich sitting by the pool drinking champagne.

jwest

DeLong must be reading my mind.

I just can’t stand to be around clowns, midgets and poor people. This must be why I avoid the circus at all costs.

Joe Mealyus

"Lizardbreath at Unfogged cleverly shifts the topic...."

Note that in an update Lizardbreath writes that Galt is "still living in a fantasy world in which the motivation for policies that reduce inequality is to injure the rich, rather than help the poor."

Delong (singled out by Galt):

"Surely public policy should weigh the spite-generated utility the rich gain from their conspicuous consumption as worth less than nothing?"

It's easy to see (unless you're Lizardbreath, I suppose) why Galt thinks that Delong is suggesting that policies that hurt the rich without otherwise helping the poor might therefore be optimal ... hence her somewhat tongue in cheek (not that Lizardbreath gets that either) analogy of throwing acid in Cindy Crawford's face. (The acid makes Cindy uglier but - this is the point - doesn't make anyone else prettier).

clarice

Personally, I think we should start by really, really taxing skinny, young gorgeous models and see if that helps before proceeding further.I've always been impressed with Dahl and Lindbloom's notion that the pragmatic way to social change requires that we start small, see what works, before initiating gigantico changes.

Joe Mealyus

By the way, note that even if you buy Lizardbreath's (albeit perhaps without understanding what she's disdaining) disdain of the idea that "motivation for policies that reduce inequality" solely by injuring the rich "is to injure the rich, rather than help the poor," Galt really does provide a clever answer:

"It is not that I admire the rich for their gloating, or disdain the poor for their envy. I think that both are distasteful, in exactly the same degree, because *they are both exactly the same emotion*: the rich gloat, and the poor long to be entitled to gloat. The fundamental desire--to Lord it over others--is exactly the same; it is not edified merely because the possessor is unsuccessful at it, any more than the attempted murderer is on a higher spiritual plane than the fellow who actually managed to complete the act."

In other words, if Lizardbreath (or anyone else) wants to say something like "we're not injuring the rich to help the rich, but to help the poor," Galt's idea is that it only helps the poor by rewarding the same thing - "the same emotion" - that the rich is being punished for the first place.

Extraneus

But it does! It makes everyone prettier except the formerly pretty, who become the new ugly.

Seriously, though, it took reading The Road to Serfdom, at least for me, to realize just how wide the gulf between socialism/socialists and classical liberalism/liberals is, and it's pretty wide.

sbw

High altitude pilots can be deprived of oxygen to the point of uselessness. Films show pilots in altitude chambers flailing about. . . a scare tactic to remind us that hypoxia can be deadly, with the pilot unable to save himself, much less his crew and passengers.

Could it be that Brad is suffering from the rarified atmosphere of academia? Is he suffering from a reality-based fantasy that justifies a spite-motivated progressive tax code?

I wonder if the real lesson is that what passes for evidence in academia is often only assertion -- that something said with gravity could just as easily be Ward Churchill or John Kerry talking.

Bob

Great read over at Back Talk by engram

http://engram-backtalk.blogspot.com/>The "Wages and Productivity" Hoax

nicely done engram!

JohnH

Paris Hilton: show-off. High taxes

Andre Aggasi: nice guy. Low taxes

Bill Gates: irritating, even though gives away a lot of money. High taxes

John Kerry: doesn't deserve his money. High taxes

Tom Maguire: maybe not rich. Low taxes

Next?

Patrick R. Sullivan

There are some pretty good comments to 'Jane Galt's ost too, such as:

'Very nice post. If it had been posted as a comment on DeLong's blog, he surely would have deleted it and banned you for life.'

Neo

While taxing the rich has it's (anti-snob) appeal, the overall structure of the current tax system relies so heavily on the rich that when they get a cold, the federal deficit suffers too (as if anybody really cares).

Half of all Americans have no stake in the income tax system because they pay none. The income tax means as much to them as the death tax, it's somebody else's tax/problem, not theirs. When half of all potential taxpayers pay no income taxes at all, and the top 1% pay 38% of all income taxes, any notion of "American people" and equality begins to fray at all the ends. Frankly, I think it would be better if everyone had to pay a minimum tax of $1. This makes them a stake holder in the income tax system, even if it is just symbolic for the most part. They would then have a clearly legitimate claim as a full taxpayer, and an even more legitimate claim to be active in the political system.


One other thing. I suggest that the definition for rich be changed so the threshold is defined as one dollar less that what Congressmen and Senators make. So every time they get a raise, somebody gets an income tax cut. Thus making it doubly hard to justify a pay raise.

clarice

HEH!

clarice

BTW, What's his thought on estate taxes? Rich people who blow thru their dough have lower estates to pay taxes on. While those who simply squirrel it away while living on cat food in one room walkups get smacked when they die--a big penalty for not creating envy. No?

jwest

This type of progressive thinking reminds me of an encounter I had while on business in Malmo, Sweden.

Malmo is a working class town, but infested with socialists-in-training from the nearby university town of Lund. As part of their curriculum, a group of these blond heads full of mush were performing a bit of “street theater” to dramatize the inequities in their society.

The cast included the “rich man” (with accompanying evil mustache), a pillow-stuffed fat banker, a baker and, of course, a poor person. A few others played town’s people to provide the appropriate socialist response to the dialog.

Naturally, the plot opened with the poor man begging for bread from the baker. The baker, although sympathetic, tells the beggar to go away. Nearby, the rich man is bringing yet another bag of money to the banker. The narrator explains that money has hardened the heart of the rich man and that he has failed to see how wrong it was that he had so much money while the poor man had none.

I don’t remember exactly how the rich man reached his epiphany about social justice, but it goes without saying that the play ended with Swedish style income redistribution and everyone dancing with joy.

Since what brought me to that particular street and time was lunch, I asked the group if they would like to join me. (Note to fellow travelers: If you invite a dozen college-age Swedes to eat on your tab, be prepared to see some world-class eating.) We discussed the play and politics in general. Apparently, the young socialist view of the U.S. is a stark contrast between the rich whites and the poor blacks.

As a hypothetical, I asked if it would be a better long term solution if the rich man deposited his money with the banker and, due to his greed, demanded a higher interest rate. The banker, driven by greed and fear of losing the rich man’s business, would be forced to lend the money out to generate the interest. Faced with this dilemma, the banker convinces the baker, also motivated by greed, to take a loan to expand and subsequently the baker hires the beggar to work for him.

Without any prodding, a few of the students caught on that this scenario provided a level of dignity to the poor man that their redistribution model missed altogether.

So, if you travel to Sweden and happen to bump into the only two capitalists in the country, you know who to thank.


Locomotive Breath

I need only refer to the luxury tax that was passed in 1990 and repealed in 1993. To pick just one, it nearly destroyed the recreational boat building industry putting, you guessed it, thousands of working stiffs out of a job. All that "conspicuous consumption" puts bread on the table of working people.

PeterUK

Taxing the rich does not give self esteem to the poor,this can only be done through self help,burglary and robbery should therefore be made legal within certain tax bands.This prevents money being siphoned off by government and frittered away on vast bureaucracies.
Liberals who wished to enable the scheme could put the "Urobme" logo on their houses and SUVs and quick release clips on their Rolexes.Simple.

Extraneus

Yeah, that boat thing was a great example, LB. Ayn Rand would have been proud, speaking of "Jane" Galt.

clarice

PUK, I reallt like the way you think. I understand Blair has some openings to fill.

lurker

Larry Elder explains why taxing heavily against the top wealthy base is the wrong thing to do. PUK is right.

TomB

It sounds like Delong is doing his research by watching "Lifestyles of the Rich and Famous".

But the truth is better described by the book "The Millionaire Next Door". In it, the authors demonstrate the vast majority of "rich" (people with net worth over $1 million) are no different from everyone else. They are not conspicuous consumers.

Yet again another post that demostrates how out of touch Delong really is.

Lew Clark

I'm so anti-egalitarian and so pro-capitalist that I stand up and cheer every time I read that the RICH got even richer. Because, being of modest means, I still live very well. I can afford a nice house, car, good food, etc. etc. because some rich greedy bastard built a quality product and sold it at a reasonable price, then an even more greedy bastard built one and made it better and sold it cheaper, and got even more obscenely rich than the first guy. So I'm the beneficiary of greed, greed, greed.

The only way redistribution of "wealth" has worked, is making everyone poor. Except for the people in control of the redistribution, who seem to do ok despite universal poverty.

So I'll stick with greedy bastards that make my life better, over caring egalitarians that make me as equally miserable as all those around me.

tp

I have a friend who thinks there is a leisure class at both ends of the socio-economic spectrum. Maybe it is leisure that needs to be confiscated and given to the people in the middle. : ^ )

vnjagvet

HTTP, Neal Boortz's Nealz News:

The Democrats, with no small amount of help from Republicans, are making headway on their goal of shifting the entire federal tax burden in this country onto a minority of income earners. In 2004 the bottom one-half of income earners paid only 3.3% of all federal income taxes. That's down from the Clinton years. In fact, that's the lowest share paid by the bottom half ever.

According to The Wall Street Journal, the majority of American families with incomes less than $40,000 pay no income taxes at all! When you factor in the welfare program known as the Earned Income Tax Credit, many of these families are coming close to getting a completely free ride!

OK ... but what about the evil rich?

In 2004 the top 1% of all income earners earned about 19% of all income. So ... the rich really are benefiting from Bush's tax policies, aren't they? Just 1% earning 19% of all income? Sorry to burst your bubble, but that figure was higher in the Clinton years. During the time Clinton was in office this figure went from 13.8% to nearly 21%. Funny how you didn't read a lot of newspaper stories during the Clinton years about growing income inequality, isn't it? Now, under bush, the share of total income earned by the wicked rich has fallen!

But what about the income taxes! Surely George Bush has all but wiped out income taxes for the nasty rich, hasn't he?

Nope.

In 2004 the top 1% of income earners -- that crowd that earned 19% of all income -- paid 36.9% of all income taxes. The top 5% of income earners paid a whopping 57.1% of all income taxes. That's an increase under Bush. So much for "tax cuts for the rich."

OK .. well how about the super-rich? What about the top one-tenth of one percent of income earners? Lordy, I don't even know how much you have to earn to be in this crowd. From 2002 to 2004, with the hated Bush tax cuts firmly in place, the top 0.1% of income earners saw their share of total income taxes paid go from 15.4% to 17.4%. That's up a full 2% for those of you who went to government schools.

OK ... that's income taxes. But what about capital gains taxes and taxes on dividends? Bush cut those taxes too, didn't he? That's where the rich are making out like bandits, right? Well ... glad you asked. Since Bush's tax cuts the Imperial Federal Government has seen an increase of 79% in capital gains taxes, and 35% for taxes on dividends.

Just remember these figures the next time you see some Democrat whining about income inequality and the need to redistribute income. It looks like we're doing quite a bit of redistribution as it is.

lurker

Raising minimum wage is going to introduce the results opposite of what the democrats think would do.

Barney Frank

From 1932 until 1982 the top tax rate on income never fell below 63 percent. If Mr. Delong can somehow provide a metric demonstrating that the rich were less spiteful toward the poor during this period then he might have an argument.

However, as the rich historically pay a higher proportion of income taxes every time tax rates are cut they may actually be more spiteful toward the poor now because the poor aren't paying their fair share, in which case Mr. Delong should be praising Mr. Reagan and Bush for soaking the rich. Either way, as an economist the guy couldn't paint a sunset on a duck's ass.

Slartibartfast

Analogue: Professor DeLong enjoys an excess of intellectual capital, and spends it in a way that's calculated so inspire spite in those who are not so well endowed.

So, I'm thinking lobotomy.

PeterUK

This is all very unscientific of Mr de Long,first there needs to be an index of spitefulness so that there can be a direct correlation between wealth and spite.
Does spite increase in direct ratio to wealth? Is there a natural spite quotient which is not affected by fiscal conditions?
How are the spiteful poor to be assessed? Or even the spiteful middle classes?
Should there be a system of "Spite Credits" whereby developing classes can be allowed more spite credits than existing spite producing classes?
Perhaps some University Department of Applied Spiteology can provide the answers?
There needs to be a UN Envoy of Envy so that this global problem can be solved multilaterally.

Jane

A reality-based government

Why is it that the very people who wouldn't know reality if they fell over it, want to make everything "reality based"?

Joe Mealyus

"The only way redistribution of "wealth" has worked, is making everyone poor."

But one argument for the redistribution of income is that it makes the wealthy better off. In particular, it allows them to enjoy a more optimal level of "public" goods (like police and military protection, roads, etc etc).

The key is that if you're a rich person, an increase in your own is also an increase in the taxes of other rich persons.

larwyn

I am thrilled that this is out in the open.
It has been an intergral aspect of the ideology
of the LEFT and goes back to tribal cultures,
as Shrinkwapped explains in this insightful
and timely post from July 24th:

A Perspective on Tribes and Anti-Semitism

Throughout most of humanity's tenure on the planet, societies have been organized primarily along tribal lines. Tribes are by their nature based on shared ethnicity and shared religious beliefs. They also tend to have a very limited number of leaders who have first choice of assets with the rest, essentially shared communally. Furthermore, before the very recent past, most societies lived on the edge of subsistence, with very little left over for accumulating material goods. The disparity between those with the most and those with the least was actually fairly small, though this did not keep "envy" from being a significant issue and a great many tribal rules were developed in order to manage such envy. This all began to change when man began his slow march to technology.....
,,,,,,,,,

2) They direct the envy outward toward other tribes. This is one of the reasons the fantasy of the noble savage who lives in peaceful harmony with the environment and with others, is such nonsense. Tribes cannot be pacifistic; they must be war-like since their internal cohesion relies on externalizing their aggression.

From almost the time Abraham entered into the Covenant with God, the Jew has functioned as the ideal "other" tribe upon which to project one's envy. The Jews have maintained a strong cultural and religious identity despite spending two millennia in the diaspora, and have been fairly successful in most nations which have allowed (tolerated) them to flourish. Calling themselves "the Chosen People", a concept conveniently misunderstood by those who hate the Jews, has been an intolerable provocation to those who hate the Jews. Periodically, spasms of envious hatred have been unleashed against the Jews, culminating in the Holocaust, which included not only an attempted genocide, but a not so coincidental confiscation of Jewish assets by the Nazis.

Using Jews as a way to manage envy has continued to be the modus operandi of the Arab world. If anything, the problem had become exponentially more difficult with the founding of the state of Israel. Since the founding of Israel, the disparity between the accomplishments of the tiny Jewish minority in their midst, and the enormous mass of Arab and Islamic peoples surrounding them, has grown by leaps and bounds. This despite the Muslim world being blessed with the possession of a large percentage of the world's energy reserves.

Hope you read the entire post and visit Shrinkwrapped often.

Tom Maguire

In 2004 the bottom one-half of income earners paid only 3.3% of all federal income taxes.

Well... those with a regular job also pay Soc Sec and Medicare - those are pretty large budget items on the Federal revenue side.

(OK, those are "earned benefits" programs, and they get the money back later... ahhh!)

Liberals who wished to enable the scheme could put the "Urobme" logo on their houses and SUVs and quick release clips on their Rolexes.Simple.

LOL. I thought that was mandated in Britain,or at least, home defense is not allowed.

So, I'm thinking lobotomy.

Insert cheap shot here...

richard mcenroe

So when jillionaire Hollywood trust baby Steve Bing campaigns to take away the poor folks' gasoline (Prop. 87), he's just being spitefully rich?

sbw

DeLong seems to be looking a static, Newtonian universe. My intuition (FWIW) says that the velocity of money is more important than a snapshot of who has what at any given instant. Rich people either spend money or invest it -- either one contributes to the economic engine that benefits us all. Rich people do not stuff cash into a mattress. So far as velicoty is concerned, a private enterprise transaction stokes the economic engine. A transaction of confiscation and redistribution does not. So, do