Tuesday, October 26, 2010
It's the thought that counts . . .
Why spend perfectly good money on a gift someone will hate when you can find something they'll hate just as much in your own basement?
Friday, October 22, 2010
Wednesday, October 13, 2010
I Know It Pisses You Off, But
Last week, former Chairman of the Council of Economic Advisors and current Harvard University professor Greg Mankiw asserted that if the Obama administration rolled back the Bush tax cuts, he might no longer write a column for the newspaper. After taxes, there simply isn't enough reward in it. This, of course, has infuriated those who support the tax increase; one colleague of mine (and a colleague that I respect, like, and appreciate) responded with a resounding, "Oh, what a freaking selfish prick is Mankiw . . . "
And my friend may be right (though I cannot claim to have knowledge whether Mankiw is either freaking or selfish or a prick), but my friend misses two very important points. First, whatever he thinks of Mankiw and his selfishness, Mankiw is demonstrating that actions have consequences--if you increase the tax on an activity, you'll get less of it. Study after study has demonstrated that even addictive behaviors like smoking respond predictably to taxation. And so, if you increase the tax on being wealthy, which often follows as a result of taking unusual risks or having extraordinary talents, then you'll get fewer people taking risks and fewer people exercising their talents. And it should not come as a surprise that the rich are more sensitive to tax changes--increase income taxes on someone whose budget is tight, and they'll still go to work every day. But the rich, with income beyond their needs, have the luxury of simply reducing their effort with little consequence for their lifestyle.
In other words, Mankiw is purposefully and pointedly, through his actions, making the larger point that there are thousands and thousands of people at the top of the income ladder whose behavior will mimic his own. And perhaps these people, too, are all freaking selfish pricks. But that's out of your hands, my friend, and irrelevant for policymakers who must, when designing policy such as a tax increase, account only for the rich's behaviors and not their attitudes. Raising taxes will reduce investment and innovation and activity, and you may not like that, but it is what it is. No matter how much lipstick you put on a pig, it's still a pig.
The second point that eludes my friend, when he calls Mankiw a selfish freaking prick for cutting back work when taxes rise, is this: It's. Not. Your. Money! My friend wants Mankiw to continue working, regardless of the cost or benefit to Mankiw. And he wants this not because it does Mankiw any good, but because when Mankiw works, my friend receives the benefits Mankiw's taxes provide. And so my friend asks Greg Mankiw, who is no stranger to hard work, to work some more and pay some more so that my friend can pay less.
And so, dear friend, I ask the same of you. If you really believe that it's okay to ask Mankiw to work out of the goodness of his heart so that your life can be a bit easier, then it seems only fair that you to sacrifice your evenings and your weekends and take a job at the Home Depot or Baldwin City Market so that others' lives would be easier. And make it a low-paying job, please, or donate your salary to the federal government, because I want you to know in your heart that you are not working for the money it brings you (lest someone have the temerity to call you a freaking selfish prick), but so that the taxes you earn can be put to good service helping those below you on the income ladder.
In the end, it's not really the money we're talking about, it's the work. Mankiw wishes to work less, and you condemn him for it. If you are to point an accusing finger at those richer than you who don't wish to fill their every waking moment with work on your behalf, then you must also be willing to stand in their shoes and fill your every waking moment with work on behalf of those poorer than you.
And my friend may be right (though I cannot claim to have knowledge whether Mankiw is either freaking or selfish or a prick), but my friend misses two very important points. First, whatever he thinks of Mankiw and his selfishness, Mankiw is demonstrating that actions have consequences--if you increase the tax on an activity, you'll get less of it. Study after study has demonstrated that even addictive behaviors like smoking respond predictably to taxation. And so, if you increase the tax on being wealthy, which often follows as a result of taking unusual risks or having extraordinary talents, then you'll get fewer people taking risks and fewer people exercising their talents. And it should not come as a surprise that the rich are more sensitive to tax changes--increase income taxes on someone whose budget is tight, and they'll still go to work every day. But the rich, with income beyond their needs, have the luxury of simply reducing their effort with little consequence for their lifestyle.
In other words, Mankiw is purposefully and pointedly, through his actions, making the larger point that there are thousands and thousands of people at the top of the income ladder whose behavior will mimic his own. And perhaps these people, too, are all freaking selfish pricks. But that's out of your hands, my friend, and irrelevant for policymakers who must, when designing policy such as a tax increase, account only for the rich's behaviors and not their attitudes. Raising taxes will reduce investment and innovation and activity, and you may not like that, but it is what it is. No matter how much lipstick you put on a pig, it's still a pig.
The second point that eludes my friend, when he calls Mankiw a selfish freaking prick for cutting back work when taxes rise, is this: It's. Not. Your. Money! My friend wants Mankiw to continue working, regardless of the cost or benefit to Mankiw. And he wants this not because it does Mankiw any good, but because when Mankiw works, my friend receives the benefits Mankiw's taxes provide. And so my friend asks Greg Mankiw, who is no stranger to hard work, to work some more and pay some more so that my friend can pay less.
And so, dear friend, I ask the same of you. If you really believe that it's okay to ask Mankiw to work out of the goodness of his heart so that your life can be a bit easier, then it seems only fair that you to sacrifice your evenings and your weekends and take a job at the Home Depot or Baldwin City Market so that others' lives would be easier. And make it a low-paying job, please, or donate your salary to the federal government, because I want you to know in your heart that you are not working for the money it brings you (lest someone have the temerity to call you a freaking selfish prick), but so that the taxes you earn can be put to good service helping those below you on the income ladder.
In the end, it's not really the money we're talking about, it's the work. Mankiw wishes to work less, and you condemn him for it. If you are to point an accusing finger at those richer than you who don't wish to fill their every waking moment with work on your behalf, then you must also be willing to stand in their shoes and fill your every waking moment with work on behalf of those poorer than you.
Subscribe to:
Comments (Atom)