Drudge Retort: The Other Side of the News
Monday, January 07, 2019

Paul Krugman: I have no idea how well Alexandria Ocasio-Cortez will perform as a member of Congress. But her election is already serving a valuable purpose. You see, the mere thought of having a young, articulate, telegenic nonwhite woman serve is driving many on the right mad -- and in their madness they're inadvertently revealing their true selves.

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"One thing missing from the discussion so far is the point that a 70 percent top tax rate exists, not merely in midcentury US tax codes or in academic papers, but also in the real world right now. Sweden has a 70 percent marginal tax rate and it kicks in, not at $10 million like AOC proposes, but at around $98,000. AOC's proposal is quite modest by comparison."

"What a 70 percent tax rate would look like is thus much less hypothetical than people imagine it to be. Sweden is not perfect but it's a high-income successful country where ordinary people have a higher standard of living than their US peers."
www.peoplespolicyproject.org

#1 | Posted by PunchyPossum at 2019-01-05 10:58 PM | Reply

Sweden focuses its taxation on labor and consumption, not capital gains; which is in line with US taxation about 30%.

The top marginal rate in Sweden is ~61% I haven't seen 70%.

Sweden has no property tax, inheritance tax or gift tax.
Sweden has a 9% VAT.

So yeah if you want to compare, lets it compare it ...

On top of all that Sweden is a much smaller scale than the US.

#2 | Posted by AndreaMackris at 2019-01-06 12:47 AM | Reply

"The top marginal rate in Sweden is ~61% I haven't seen 70%."
"Sweden has a 9% VAT."

Um...not trying to throw any tough things at you like, you know...addition, but doesn't 61% + 9% = 70%...?

#3 | Posted by Danforth at 2019-01-06 12:50 AM | Reply

A high tax rate ie 50ish percent doesn't discourage productivity but it does encourage tax avoidance.

Raise taxes to balance the budget.
It will be good for everyone.

#4 | Posted by bored at 2019-01-06 02:01 AM | Reply

You'll have to excuse fat racist Andy's poor math skills, he was homeschooled.

#5 | Posted by aborted_monson at 2019-01-07 09:11 AM | Reply | Funny: 1

"The top marginal rate in Sweden is ~61% I haven't seen 70%."
"Sweden has a 9% VAT."

Um...not trying to throw any tough things at you like, you know...addition, but doesn't 61% + 9% = 70%...?

#3 | Posted by Danforth

No property tax? No state tax?

#6 | Posted by Sniper at 2019-01-07 10:15 AM | Reply

The righties on the DR must have some pretty big cribs, the way they get their knickers in a twist over the estate tax, which only affects estates valued at over $11 million.

"For 2017, the exemption increases to $5.5 million. In 2018, the exemption doubled to $11.18 million per taxpayer due to the Tax Cuts and Jobs Act of 2017. As a result, only approximately 2,000 people (or 0.0006% of the population) in the US are currently liable for estate tax."

en.wikipedia.org

You'll still be able to bequeath your Guns N Ammo magazine collection on to your heirs without the tyrannical government getting a bite.

#7 | Posted by schifferbrains at 2019-01-07 10:51 AM | Reply | Newsworthy 2

The righties on the DR must have some pretty big cribs, the way they get their knickers in a twist over the estate tax, which only affects estates valued at over $11 million.

#7 | Posted by schifferbrains

Nope. They're all just brainwashed into fighting for the interests of billionaires at their own expense. Same as they do every day on every issue.

#8 | Posted by SpeakSoftly at 2019-01-07 07:12 PM | Reply | Newsworthy 4

The underlying premise of this article is horribly flawed.

"Diminishing marginal utility is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he'll barely notice it."

Diminishing marginal utility only applies to goods or services that have utility. Currency does not. Currency only represents opportunity. And there is no diminishing marginal return on opportunity. We can prove this by looking at high income earners. If the premise of the article were true, at some point, earning another dollar wouldn't be worth the effort put in. Effectively, the earner's time would be of greater value to them then another dollar. So they would top doing whatever it was they were doing that resulted in earnings and use their time for something else.

And I don't understand how you can possibly expect that someone would keep engaging in activity that resulted in income if they only got to keep a small amount of it? Why wouldn't they just stop? The other possible outcome is that costs to keep these income earners in service might go up dramatically. After all, if I'm a brain surgeon tasked with conducting very difficult and very specialized procedures, there will be a time when I will likely want to stop doing this work as remuneration decreases. Then, not only do you lose tax revenues, but also the services these individuals provided.

#9 | Posted by madbomber at 2019-01-07 10:50 PM | Reply

"After all, if I'm a brain surgeon tasked with conducting very difficult and very specialized procedures, there will be a time when I will likely want to stop doing this work as remuneration decreases. Then, not only do you lose tax revenues, but also the services these individuals provided."

When I first met with my cancer surgeon and was worrying about how much of my treatment my insurance would cover, she said to me: "Don't worry about it. We'll work something out. I didn't get into this line of work for the money." True story.

#10 | Posted by Gal_Tuesday at 2019-01-07 11:00 PM | Reply | Newsworthy 2

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- I didn't get into this line of work for the money

That might as well be in Sanskrit as far as MB understanding it.

- if I'm a brain surgeon

You'd be a lonely one.

- I don't understand how you can possibly expect that someone would keep engaging in activity that resulted in income if they only got to keep a small amount of it? Why wouldn't they just stop?

Because they still need the income. When top tax rates were 70-90 percent, people didn't stop werking... and the economy did just fine, thank you very much.

#11 | Posted by Corky at 2019-01-07 11:31 PM | Reply

Getting to keep 30% of each million over $10 million isn't chump change.

#12 | Posted by Gal_Tuesday at 2019-01-07 11:38 PM | Reply

"After all, if I'm a brain surgeon tasked with conducting very difficult and very specialized procedures, there will be a time when I will likely want to stop doing this work as remuneration decreases. Then, not only do you lose tax revenues, but also the services these individuals provided."

If you were a brain surgeon, you would make such a dumb argument.

People who only work for money can find easier ways to make more money than going through med school and taking on crippling debt.

#13 | Posted by snoofy at 2019-01-08 01:25 AM | Reply | Newsworthy 2

"And I don't understand how you can possibly expect that someone would keep engaging in activity that resulted in income if they only got to keep a small amount of it? Why wouldn't they just stop? "

Did Henry Ford stop building cars after 1932? Did any rich person stop trying to become richer after that year.

That fear mongering comment has been repeated for over 80 years but it still isn't true.

#14 | Posted by danni at 2019-01-08 10:28 AM | Reply | Newsworthy 1

The righties on the DR must have some pretty big cribs, the way they get their knickers in a twist over the estate tax, which only affects estates valued at over $11 million.

#7 | Posted by schifferbrains

That money has been taxed when it was earned.,

#15 | Posted by Sniper at 2019-01-08 10:56 AM | Reply | Funny: 1

"That money has been taxed when it was earned"

So was the money I paid my barber. Should he have to pay taxes?

#16 | Posted by Danforth at 2019-01-08 11:00 AM | Reply

That money has been taxed when it was earned.

#15 | POSTED BY SNIPER

So, since the heirs get the money for doing nothing, it shouldn't be taxed?

That's one of the lamest arguments I've ever seen you make.

#17 | Posted by Whatsleft at 2019-01-08 11:48 AM | Reply

When the first paragraph of a biased article starts off with the Dems proving how racist they are, you know the rest of the article is junk.

#18 | Posted by humtake at 2019-01-08 11:59 AM | Reply

#18 | POSTED BY HUMTAKE

You'd be a ------- moron to think Krugman represents liberals or even most dems. The one-hit-wonder is a clueless clinton cultist. While he's right that AOC is awesome, he is definitely racist with that first remark. That remark is very neoconservative, like many die-hard clinton supporters; so you cannot say its represents modern democrats.

#19 | Posted by IndianaJones at 2019-01-08 01:08 PM | Reply

Dr Jones,

Liberals and progressives have been quoting Krugmann with reverence for at least a decade.

#20 | Posted by JeffJ at 2019-01-08 01:11 PM | Reply

People who only work for money can find easier ways to make more money than going through med school and taking on crippling debt.

#13 | POSTED BY SNOOFY

This is one of the core problems with the "conservatism" of the American right wing. They value nothing but money and can't understand anyone being motivated by other values. It seems to be an Ayn Rand thing, the worship of psychopathy.

#21 | Posted by WhoDaMan at 2019-01-08 03:15 PM | Reply

When the first paragraph of a biased article starts off with the Dems proving how racist they are, you know the rest of the article is junk.

#18 | Posted by humtake

I just re-read the first paragraph.

I have no idea how well Alexandria Ocasio-Cortez will perform as a member of Congress. But her election is already serving a valuable purpose. You see, the mere thought of having a young, articulate, telegenic nonwhite woman serve is driving many on the right mad -- and in their madness they're inadvertently revealing their true selves.

Can you point out where the young, articulate, telegenic nonwhite woman touched you?

#22 | Posted by donnerboy at 2019-01-08 05:29 PM | Reply

Getting to keep 30% of each million over $10 million isn't chump change.

#12 | Posted by Gal_Tuesday

And what right does the government have to the other 70%?

#23 | Posted by Sniper at 2019-01-08 05:47 PM | Reply

So was the money I paid my barber. Should he have to pay taxes?

#16 | Posted by Danforth

That is income to him dummie.

#24 | Posted by Sniper at 2019-01-08 05:48 PM | Reply

"And what right does the government have to the other 70%?"

What right does the government have to any of it, Sniper?

I wish we could bet here, because I'd bet your welfare check you won't answer.

#25 | Posted by snoofy at 2019-01-08 05:50 PM | Reply

"When I first met with my cancer surgeon and was worrying about how much of my treatment my insurance would cover, she said to me: "Don't worry about it. We'll work something out. I didn't get into this line of work for the money." True story."

So what was worked out, just out of curiosity?

Did he give you a 70% discount? Maybe do it for free?

I had a similar situtation when I was in college and didn't have insurance. The deal that was worked out is the doc brought in students, and the costs were partially written off as a training expense. But the doctor still got paid. You seem to implying that doctor's (and everyone else) would be willing to perform the work just because it was needed. Marx said something very similar...and we've seen how that worked out.

#26 | Posted by madbomber at 2019-01-08 10:41 PM | Reply

"You'd be a lonely one."

Maybe, but I'd be a gainfully employed one. At least up to the point where the remuneration for providing that service dropped below the value of the time and effort it took to provide that service.

"Because they still need the income. When top tax rates were 70-90 percent, people didn't stop werking... and the economy did just fine, thank you very much."

Yeah. That had nothing to do with the fact that, post WWII, the US was the only industrialized economy left standing.

#27 | Posted by madbomber at 2019-01-08 10:47 PM | Reply

"People who only work for money can find easier ways to make more money than going through med school and taking on crippling debt."

It's not a big deal to take on debt when you're going to be making six figs the minute you start practicing. Of course that would change if a significant portion of that six figs was going to the government in higher taxes. In that case, you'd be right. Why go to all that effort to be a cash cow for the government.

#28 | Posted by madbomber at 2019-01-08 10:49 PM | Reply

"Liberals and progressives have been quoting Krugmann with reverence for at least a decade."

Anyone who knows anything about economics knows that PK is (or was) the world's expert on trade theory. He didn't win a nobel prize because he liked the Clintons.

#29 | Posted by madbomber at 2019-01-08 10:52 PM | Reply

"They value nothing but money and can't understand anyone being motivated by other values. It seems to be an Ayn Rand thing, the worship of psychopathy."

It's more of an economics thing, actually. Which is likely why you don't understand it.

#30 | Posted by madbomber at 2019-01-08 10:52 PM | Reply

"And what right does the government have to the other 70%?"

A 70% tax on income over $10 million is a fair trade in exchange for the largest consumer market in the world, security against tyrannical nations around the world, safe drinking water and sanitation for most people and a remarkable transportation and communication system. None of which could have ever happened without the New Deal.

Even conservative Republican Roberts understands the government has the right to impose taxes.

#31 | Posted by bayviking at 2019-01-09 08:33 AM | Reply | Newsworthy 1

#30 | POSTED BY MADBOMBER

Diminishing utility is actually a fundamental tenant of economics (micro). And it also acknowledges that (at least most) people do thing for reasons outside of the monetary cost vs utility tradeoff (behavioral economics). Though actually quantifying those things and how they influence people's behavior is a lot more difficult.

Maybe you and Nulli should take a remedial class together. Like you he also claims that he once actually understood economics.

#32 | Posted by gtbritishskull at 2019-01-09 08:59 AM | Reply | Newsworthy 1

And what right does the government have to the other 70%?

#23 | POSTED BY SNIPER

They have no right to it until it changes hands (at least under our current tax system). When it does change hands it becomes income, which the government can tax as the democratically (somewhat) elected representatives deem fit.

I don't understand why you feel that we should have this hereditary untaxed income. I work hard for and pay taxes on my income. I don't see why just because someone DIDN'T work hard for their income they should also not have to pay taxes on it.

#33 | Posted by gtbritishskull at 2019-01-09 09:06 AM | Reply | Newsworthy 1

I'm liking some GTBRITISHSKULL posts! Brilliant!

#34 | Posted by danni at 2019-01-09 09:15 AM | Reply

"It's more of an economics thing, actually. Which is likely why you don't understand it."

This clown says other people don't understand economics when he can't understand the economics that built our middle class. Madbomber, when you figure out that get back to us.

#35 | Posted by danni at 2019-01-09 09:17 AM | Reply

Sweeden also has a territorial tax and doesn't tax foreign earnings. Again, it's about effective rates, not marginal rates. Also you have to look at the taxable base. High rates on a small base won't generate significant revenue. I have been saying forever that if we are going to have social programs like they have in European countries we will need to institute a VAT to pay for it, or shift spending from other programs/military.

#36 | Posted by taxman at 2019-01-09 11:46 AM | Reply

Looks like boston college has a sub-par economics department.

Alexandria Ocasio-Cortez Early Life and Education

Born to a working-class Puerto Rican family in the Bronx, New York, Ocasio-Cortez graduated from Boston University, majoring in economics and international relations, and later worked for Senator Ted Kennedy's office where she focused on immigration issues.

#37 | Posted by Sniper at 2019-01-09 12:13 PM | Reply

It's more of an economics thing, actually. Which is likely why you don't understand it.

#30 | POSTED BY MADBOMBER

No, it's more of a moral thing. Economics has no opinion on morality. Markets are amoral, therefore should not rule our lives.

#38 | Posted by WhoDaMan at 2019-01-09 07:12 PM | Reply

MadBomber thinks man should serve the economy.

I think the economy should serve man.

And that's the difference between fascism and freedom, in a nutshell.

#39 | Posted by snoofy at 2019-01-09 07:20 PM | Reply | Newsworthy 2

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