It’s hard to argue with this list and the conclusions that PK draws from it. Let me try. This is the raw data that the chart Krugman used was based on:
First let me point out that the 2009 data for the USA (30.1%) was the lowest in the 13 years of information presented. This is because the US was in a recession in 08 and that always means lower tax receipts. To make a statement, Krugman uses the most opportune data to support his position. When you look at the past and projected numbers you see that the US average of ~34% is right in line with Japan, Korea, Australia and Switzerland.
For me, the most significant error by Mr. Krugman and his chart is that he deliberately chooses to exclude exactly how high those tax rates are in the countries he holds up as shining examples. Yes it is true, Norway Sweden, Denmark, Finland, and France have higher taxes than does America. But look what they are paying to get to the top of the list. Respectively 56%, 56%, 54%, 53% and 49% of GDP. Who wants to be on the top of that list? I doubt the folks in Sweden or Denmark are so proud to have made it to the top.
What Mr. Krugman shows up as an example of “what we should do” is actually a disaster. Mr. Krugman should get his head out of, well, academia and start talking to Americans of all stripes. Liberals, conservatives and all the folks in between. He won’t find one that will stand up and support 50+% taxes on GDP. What may be acceptable in Sweden is simply not going to sell in America.
If he bothered to ask a few economists what they thought 50%/GDP taxes would do for America he would also get an earful. That is just
It shouldn’t surprise us a bit when politicians like Ryan and Obama talk about numbers and budgets and spin every chart to suit their agenda. It quite another matter when Nobel economists do it.
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I know there are still people who take Krugman seriously. But hey. :)
ReplyDeletehttp://krugman-in-wonderland.blogspot.com/
http://theantikrugman.blogspot.com/
Keep hiring illegals to work around your house and pushing amnesty for illegals you duplicitous prick
ReplyDeleteBoy that's quite the irrational rant you've got going Bruce, you seem to think that Krugman advocates big tax increases across the board, but my reading of Krugman is that he wants to raise taxes on the high income earners only to get the rate back to where it was pre-Bush II. Rates for the rich (Krugman included) dropped by 50% under Bush II and Krugman wants them to rise back to where they were pre Bush II. These folks can easily afford a tax hike, while low to middle income earners cannot. Nothing personal, but I'm more inclined to listen to the advice of a Nobel Prize winner than a retired banker. How, other than raising taxes on those who can afford to pay, would you fix the financial clusterfuck that this country has created for itself?
ReplyDeleteSure, high taxes are not so great for the rich. But those countries at the top just so happen to be, and I'm sure it's just by accident and has nothing to do with their taxes going to infrastructure and education etc, but they have the highest educational standards, the best quality of life, best health care, highest human development ratings in the western world. Horrible places they are....
ReplyDeleteAmerica is now a very bad deal for anyone who's not rich. Taxes are the price you pay for high public standards. Since American elites don't want that, America has become a very Undesirable place to live characterized by extreme social inequality-instability, and we all know where that leads. We simply refuse even to travel there anymore.
Otherwise, you are correct in one thing, Krugman is most definitely a fool.
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ReplyDeleteBruce, you omit the following crucial piece of information: Nordic countries run state-owned oil businesses that account for large portions of their revenues. 27% of rev for Norway in 2009. http://www.regjeringen.no/en/sub/eiti---extractive-industries-tranparency/eiti-rapporter/eiti-report-for-2009-confirms-norwegian-.html?id=634665
ReplyDeleteThe few others I pulled up have similar numbers. Canada generates rev from resource taxation at a high levels and from the state-run banks. I would bet most of the nations above the US all have state run industry. Krugman just wants us to be at least half communist, no big deal.
He is an intellectual coward and intentionally misrepresents facts on a routine basis to further his agenda. Maybe he is jockeying to step in as FOMC chair when torches and pitchforks line up outside the Fed.
Redford, I'm on record here saying that taxes have to rise. I have advocated a means test for Social Security. I am apposed to the hedge fund ordinary income exemption.
ReplyDeleteMy gripe with Krugman was that he spun this chart. If you read him regularly you would see that he does it all the time.
Redford, you should stick the mainstream media ("MSM") websites or Huffington ("AOL"), not serious blogs like this one. To beging with "taxes on the rich" aren't taxes on the rich; they are taxes on people trying to get rich ($250K per annum isn't rich anywhere, trust me); the truly wealthy pay very little in taxes b/c they are either balance sheet rich and/or have achieved a position where they can defer most of their comp through equity grants and other schemes (offshoring). Secondly, any upward delta in taxes is simply a small handful of people taking more from the earners to redistribute to the masses; the European model that is working so well (just ask the Greeks, Portugese, Spanish and other socialized countries in W. Europe). Thirdly, the bottom 50%-60% of people in this country (likely yourself included) pay almost nothing in taxes and are incented to maintain and extend that structure as high and as long as they can. Fourth, increased taxes have absolutely nothing to do "the financial clusterfuck that this country has created for itself", that is just an outright buffoonish comment. Increased taxes have everything to do with the endless wars and unfunded entitlements that you and your ilk so dearly love. And by the way, the way to fix the financial mess is to let the bankruptcy laws work as they were intended, for the legal system to hold financial institutions accountable for their corrupt practices and for TBTF institutions to be broken up. Truly lastly, the Nobel prize is laughable; witness recently when a community organizer won for absolutly no reason at all other than his marvelous marketing machine, the sheeple who "believe" and the leftist European elite who comprise that lousy institution. There is always plenty for people like you to read over at McNews (USA Today), stick to that.
ReplyDeleteNice Matt...Krugman is not even worth reading, his run the debt up at all costs reeks in contempt for the middle class and poor...He is a banker/fed/treasury/big govt. shill...
ReplyDeleteEnd the friggin wars. That'll save us a BUNDLE.
ReplyDeleteWhy the hell are we destroying and rebuilding infrastructure half way across the world? Oh yeah, it enriches the oligarchs sucking on US Govt teat even further. Not to mention gives 'em better control of those oil resources enriching them even further.
The US is gonna' turn into a shite-hole at the rate we're going. It is starting to look more and more like the 3rd world, i.e., oligarchy at the top, a small number of middle class tax mules who help administer the oligarchy and social services, and a vast, disenfranched poor. Don't think that's where we're going? I lived in Mexico from 1981-1983. I saw how it was done there. Trust me, this is where we are headed.
You folks who don't want to pay taxes so that our country can have great social services are traitors. Unfortunately my cynical side says that more taxes are only going to more fraud, waste, and wars--so maybe y'all are right.
This is NOT going to end well for sure.
I agree, end the wars, and increase utilization of our own resources over time.
ReplyDeleteBy the way, those countries are quite homogenous, and Nordic countries don't appear to have the indigenous underclass issue we "southerners" have, and dare i say i think it's just genetics, not their good infrastructure. It will be interesting to see what happens as their large immigrant population matures--they have a liberal asylum policy.
I strongly suspect the tax burden is complete orthogonal to quality of life, due to the simple fact that "All taxes come out of rents".
ReplyDeleteEveryone's dominant life expense is land, since the price of land is determined by how much we can afford to pay for it.
Raise taxes -- even income taxes -- and land prices will go down.
So a 50% tax burden should result in lower rents and land values.
This is why the Scandinavian countries are tops in "national gross happiness".
High taxes are the free lunch that neo-classical economics says can not exist.
Don't get worked up into a lather Matt, higher taxes on high income earners are coming sooner or later so just accept that fact. There is no other way out of the financial hole the US has dug for itself, expect perhaps bankruptcy or new immigration on a massive scale. Krugman has it right again. Agreed that Obama's peace prize was a complete joke in retrospect, the Swedes bought into his campaign b.s. in a big way, but they weren't alone. Never in the history of the USA have so many been so fooled by such a lying douchebag of a politician.
ReplyDelete