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(Greg Mankiw)   Chairman of the Economics department crunches the numbers on the effective tax rates in 2009. You folks that want a return to the glory days of 70's era taxation might want to sit down before clicking the link   (gregmankiw.blogspot.com) divider line 93
    More: Interesting, transfer payments, tax rates, distribution of income  
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3800 clicks; posted to Business » on 18 Jul 2012 at 12:32 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-18 12:18:03 PM
i would be willing to bet that income growth disparity has a lot more to do with the middle class being net transfer recipients than any change in tax code. the middle quintile has a lot more in common with the working poor these days than the working well-off.
 
2012-07-18 12:31:13 PM

thomps: i would be willing to bet that income growth disparity has a lot more to do with the middle class being net transfer recipients than any as a consequence of 1981-present change in tax code. the middle quintile has a lot more in common with the working poor these days than the working well-off.


More accurate, but you're otherwise on the money.
 
2012-07-18 12:33:44 PM
That is, the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess.

Maybe because the middle class is poorer in real terms, especially compared to the insane growth in wealth at the top.
 
2012-07-18 12:34:21 PM

BKITU: thomps: i would be willing to bet that income growth disparity has a lot more to do with the middle class being net transfer recipients than any as a consequence of 1981-present change in tax code. the middle quintile has a lot more in common with the working poor these days than the working well-off.

More accurate, but you're otherwise on the money.


fair.
 
2012-07-18 12:35:39 PM
It seems like to make his numbers work better he's considering "taxes minus government spending on you", instead of what most people think of when they say "effective tax rate"
 
2012-07-18 12:39:22 PM
Ya hear that America? You're not struggling enough. You've got it too easy. You should go outside and lick the shoes of the first banker you see.
 
2012-07-18 12:43:08 PM
It should also be noted that "transfer payments" are merely one type of benefit, and it just so happens that its the one that helps poor people more. It's easy to monetize so its easy to put into an equation. But why is a transfer payment to a poor person a benefit any more 'real' than the existence and operation of the SEC is to a rich person?

This is a truly meaningless statistic meant to do nothing more than make poor people look worse.
 
2012-07-18 12:57:31 PM
That article is a huge oxcart full of high-grade cow manure.

Might as well measure the number of squirrels in everyone's yard and assign them to wealth quintiles, then infer that poor people eat more squirrel based on that assignment.

Pieces like this, written by people like this, for text books like the one for which he was doing this pointless exercise, are just another example of Why We Suck ®.
 
2012-07-18 01:01:41 PM
/And now that I read who wrote it, I refresh and reiterate my opinion.
//Havard? Sweet gawd help us.

I suggest hunting seasons (Muzzle loader, Bow, Rifle) on these types of people. They have bsolutely wrecked our nation.
 
2012-07-18 01:02:18 PM

DamnYankees: It should also be noted that "transfer payments" are merely one type of benefit, and it just so happens that its the one that helps poor people more. It's easy to monetize so its easy to put into an equation. But why is a transfer payment to a poor person a benefit any more 'real' than the existence and operation of the SEC is to a rich person?

This is a truly meaningless statistic meant to do nothing more than make poor people look worse.


You also forget farm subsidies, oil subsidies, TARP (which was only temporary...), loan guarantees, the courts (which help out companies far more and far more often than they help individuals), HUD-based loans, SBA loans, government-funded R&D (which I guess you could argue helps everyone equally, except for the owners of the company doing the research), and whatever Newt Gingrich did with Fannie Mae to earn $500,000.

Mankiw is also providing a pretty good argument for the need to let the Bush rate cuts - all of them - expire.
 
2012-07-18 01:05:20 PM

Dr Dreidel: You also forget farm subsidies, oil subsidies, TARP (which was only temporary...), loan guarantees, the courts (which help out companies far more and far more often than they help individuals), HUD-based loans, SBA loans, government-funded R&D (which I guess you could argue helps everyone equally, except for the owners of the company doing the research), and whatever Newt Gingrich did with Fannie Mae to earn $500,000.


Yeah, I just took the SEC as one small example of a benefit the government provides which overwhelmingly helps richer people.
 
2012-07-18 01:10:27 PM
The middle quintile is not same thing as the middle class unless you believe that there's equal numbers of poor people and rich people.
 
2012-07-18 01:13:14 PM
This is an interesting look at federal tax rates, but it doesn't take into account any of the other taxes that people pay. In effect these numbers are a small part of a much bigger issue. Unfortunately, they will be used to "prove" that the tax code is unfair, and that the rich deserve more tax cuts. However, for those who are attacking the author of this article, I didn't get any significant slant in this. The numbers are what the numbers are. They are an incomplete part of a much bigger picture, but facts are still facts.
 
2012-07-18 01:17:46 PM
What I learned on Fark today:

Your average evryday Farker is smarter than the Chair of the Department of Economics at Harvard.

Thanks Fark!
 
2012-07-18 01:17:51 PM

DamnYankees



It should also be noted that "transfer payments" are merely one type of benefit, and it just so happens that its the one that helps poor people more. It's easy to monetize so its easy to put into an equation. But why is a transfer payment to a poor person a benefit any more 'real' than the existence and operation of the SEC is to a rich person?

This is a truly meaningless statistic meant to do nothing more than make poor people look worse.


What are you talking about. Ya know, just cause you say something is meaningless doesn't make it so.

This points out what has been going around since the CBO issued that report. It showed that 94% of the FIT paid by individuals are paid by the top 20%.

No, the reason the middle class is a net negative contributor has a lot to do with baby boomers and other retiring and living longer lives on their own savings and drawing social security, medicare and other benefits. Guy I worked with has be earning his paycheck and drawing Social Security for the last 5 years, those are factors that lead to the middle 20 at a negative contribution rate.

Obviously, poor people have much more in transfer payments from welfare, wic, foodstamps, section 8 housing etc. There is nothing derogatory about that.

This just proves the fallacy that we can tax rich people more to get out of the fiscal mess we are in, they pay 94% of the taxes already. The SEC, really. I thought the latest was that the SEC needed strengthening to keep the wall street types from doing harm to working families and their mortgages and pension plans.

Thats what this blog shows, it doesn't make poor people look bad.
 
2012-07-18 01:19:30 PM

The Reverend Smith: What I learned on Fark today:

Your average evryday Farker is smarter than the Chair of the Department of Economics at Harvard.

Thanks Fark!


i don't think that's what people are saying here. the chair of the department of economics at harvard dropped a statistic in a blog with almost zero context or analysis. your averge evryday farkers are just trying to provide that. it's kind of what these threads attached to the articles are for.
 
2012-07-18 01:25:50 PM

Buffalo77: This just proves the fallacy that we can tax rich people more to get out of the fiscal mess we are in, they pay 94% of the taxes already.


If they make 40% of the US' yearly income, you'd be right.

If they make 94%, they'd break even, as a group.

If they make 98%, they're getting a great deal.

Care to cite how big the share of yearly income "those who pay 94% of federal income taxes" (i.e. "rich people" as you defined them) made last year?
 
2012-07-18 01:26:31 PM

Dr Dreidel: Care to cite how big the share of yearly income "those who pay 94% of federal income taxes" (i.e. "rich people" as you defined them) made last year in 2009?


Let's stay consistent with Mankiw's analysis.
 
2012-07-18 01:48:54 PM

Buffalo77: DamnYankees


It should also be noted that "transfer payments" are merely one type of benefit, and it just so happens that its the one that helps poor people more. ***snip***

This just proves the fallacy that we can tax rich people more to get out of the fiscal mess we are in, they pay 94% of the taxes already. The SEC, really. I thought the latest was that the SEC needed strengthening to keep the wall street types from doing harm to working families and their mortgages and pension plans.

Thats what this blog shows, it doesn't make poor people look bad.


The point is that there are many government funded endeavors that benefit people with greater wealth, and, in fact, make the amassing of that wealth possible. This stat never takes those into account, nor does the blog even mention them as a part of "policy response." The implication is made that poor people are the only beneficiary of "government largess," when that is not accurate.
 
2012-07-18 02:00:26 PM

HotIgneous Intruder: That article is a huge oxcart full of high-grade cow manure.


I think you missed the point of the article entirely.
 
2012-07-18 02:06:55 PM

Cinaed: HotIgneous Intruder: That article is a huge oxcart full of high-grade cow manure.

I think you missed the point of the article entirely.


No, It's that the numbers don't fit his reality, so he rejects them. There are some people who reject any facts that don't support their belief system.
 
2012-07-18 02:07:40 PM
STOP THIS! STOP ALL OF THIS NOW!!!

Now...
Where's my free money I'm entitled to for not being rich?
 
2012-07-18 02:32:02 PM

Buffalo77: Thats what this blog shows, it doesn't make poor people look bad.


Um.... no. It infers that over the past 30 years or so has been middle class is shrinking and the lower class has been growing.
 
2012-07-18 02:44:49 PM
Perhaps it is worth noting that N. Gregory Mankiw was the chairman of the President's Council of Economic Advisers under George W. Bush from 2003-2005 and was thereafter a principle economic adviser to Mitt Romney's presidential campaign in 2007.

I'm not saying that former administration officials never produce anything of value but we should be clear that the author is firmly playing for team R.
 
2012-07-18 02:47:54 PM
Dr Dreidel


Buffalo77: This just proves the fallacy that we can tax rich people more to get out of the fiscal mess we are in, they pay 94% of the taxes already.

If they make 40% of the US' yearly income, you'd be right.

If they make 94%, they'd break even, as a group.

If they make 98%, they're getting a great deal.

Care to cite how big the share of yearly income "those who pay 94% of federal income taxes" (i.e. "rich people" as you defined them) made last year?


Well you can go figure that out yourself but here are a couple of facts:

bottom 90% - income below $104,696 (average income, $30,374*)
top 10% - income above $104,696 (average income, $269,658*)

Also the split between total income of the group is 45% on total income earned for top 10% and 55% for bottom 90%


This may not correlate to the 80 -20 but it does show that the top 20% is not earning 94% of total income which is intuitive any way since we have a progressive tax system. Your premise may be true if for example we had a flat tax say everyone paid 15% of their income. Then if top 20% paid 94% of taxes it would be because the earned 94% of total income.
 
2012-07-18 02:50:22 PM

Cinaed



Buffalo77: Thats what this blog shows, it doesn't make poor people look bad.

Um.... no. It infers that over the past 30 years or so has been middle class is shrinking and the lower class has been growing.


uh, no it doesn't. I know thats a popular rallying cry but it aint true.

Beside your statement has no correlation to the blog's point. It has much more to do with tax policy and the aging demographics of the country.
 
2012-07-18 02:56:50 PM
roc6783



The point is that there are many government funded endeavors that benefit people with greater wealth, and, in fact, make the amassing of that wealth possible. This stat never takes those into account, nor does the blog even mention them as a part of "policy response." The implication is made that poor people are the only beneficiary of "government largess," when that is not accurate.


Please don't start quoting Obama's off telepromtor comments which his is universally being critized for in the business community and public in general. Those programs are rounding errors in the federal budget and it these so called rich 20% are paying 94% of FIT there are in fact funding those programs that benefit them along with every other program of the federal gov't. Wealth is created by people's own hard work and wits, part of the obstacles of making a successful business are complying with all the gov't regulations. If anything it is a determinant, though necessary for the benefit of society in general, to success and wealth.
 
2012-07-18 03:02:39 PM
cache.thephoenix.com
 
2012-07-18 03:13:28 PM

BigBooper: No, It's that the numbers don't fit his reality, so he rejects them. There are some people who reject any facts that don't support their belief system.


No, it's that the contents of this blog are not reality-based except in the sense that they are a part of a self-aware self-sustaining alternate reality of a few self-fellating posers and pretenders for whom everyone else's reality is theoretical and disposable.
 
2012-07-18 03:46:41 PM

Buffalo77: uh, no it doesn't.

The most surprising fact to me was that the effective tax rate is negative for the middle quintile. According to the CBO data, this number was +14 percent in 1979 (when the data begin) and remained positive through 2007. It was negative 0.5 percent in 2008, and negative 5 percent in 2009. That is, the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess.

~FTA

It fell between 79 and 07. Then shot in the head Old-Yeller-style during the Financial meltdown. What variables would you say have had a hand in that?
 
2012-07-18 03:49:57 PM

HotIgneous Intruder: No, it's that the contents of this blog are not reality-based except in the sense that they are a part of a self-aware self-sustaining alternate reality of a few self-fellating posers and pretenders for whom everyone else's reality is theoretical and disposable.


At which Ivy League University do you chair a department?
 
2012-07-18 03:54:15 PM

Buffalo77:
Please don't start quoting Obama's off telepromtor comments which his is universally being critized for in the business community and public in general. Those programs are rounding errors in the federal budget and it these so called rich 20% are paying 94% of FIT there are in fact funding those programs that benefit them along with every other program of the federal gov't. Wealth is created by people's own hard work and wits, part of the obstacles of making a successful business are complying with all the gov't regulations. If anything it is a determinant, though necessary for the benefit of society in general, to success and wealth.


When brain damage starts to affect your physical coordination, it isn't funny anymore. At least not in the same way. You should see a doctor.
 
2012-07-18 03:58:38 PM

Buffalo77: roc6783
***snip***

Please don't start quoting Obama's off telepromtor comments which his is universally being critized for in the business community and public in general. Those programs are rounding errors in the federal budget and it these so called rich 20% are paying 94% of FIT there are in fact funding those programs that benefit them along with every other program of the federal gov't. Wealth is created by people's own hard work and wits, part of the obstacles of making a successful business are complying with all the gov't regulations. If anything it is a determinant, though necessary for the benefit of society in general, to success and wealth.


I would not consider the Armed Forces, the court system, the public education system, and public road and highways to be rounding errors in the government's budget, but I guess it is a different view we have.

Ask yourself how much wealth would be created and accumulated without the government systems that I just listed, read this, and think about the fact that without people consuming things they are adequately paid to produce, the entire system would collapse.

So work hard and use your wits, but if no one can buy your product because it can't get to stores unless you build a road, you have to teach your workers everything they should learn in grades K-12, and you have no recourse if your customers don't pay you for products you've sold them or your suppliers take your money and don't deliver, then you have approximately 0% chance of earning or accumulating wealth.

Again, the point of this blog post is to misrepresent the benefits that poor people receive from the government by only using direct transfers as an indication of "benefiting from government largess" when the reality is that the government spends trillions on shiat rich people benefit from too.

The relationship is symbiotic not antagonistic, but loyalty and working toward a common goal for everyone's benefit is gone in the face of sacrificing quality and human rights to bring up the bottom line. (If it was there to begin with and not just a product of the U.S. being the only industrialized nation not destroyed by WWII)

I am not saying I have the answer, as there is no one right answer, but biatching about how much the wealthy in the wealthiest country on earth pay in taxes, while at the same time we have people living in broken down slums and on the streets, seems ludicrous to me.
 
2012-07-18 04:07:43 PM

HotIgneous Intruder: /And now that I read who wrote it, I refresh and reiterate my opinion.
//Havard? Sweet gawd help us.

I suggest hunting seasons (Muzzle loader, Bow, Rifle) on these types of people. They have bsolutely wrecked our nation.


How about trapping? It is, in my opinion, less humane and thus far more fitting.

/says this as a guy who's actually fairly well heeled
//I'd be pissed but... well... meh...
/got mine but would go trapping or hunting with folks just for the sport
 
2012-07-18 04:44:05 PM

Mrbogey: HotIgneous Intruder: No, it's that the contents of this blog are not reality-based except in the sense that they are a part of a self-aware self-sustaining alternate reality of a few self-fellating posers and pretenders for whom everyone else's reality is theoretical and disposable.

At which Ivy League University do you chair a department?


Go ahead, buy into the oligarchic model.
They depend on deeply programmed obedient people to stay in power.
Keep swallowing their propaganda jiz and keep smiling afterward.
When it's your kid or parent or loved one who is suffering you won't be so callow and glib.
 
2012-07-18 05:18:21 PM

HotIgneous Intruder: Go ahead, buy into the oligarchic model.


You might do a better job in explaining your position on the matter with how 30+ years of methodically gathered data is somehow 'not reality-based'.
 
2012-07-18 05:51:29 PM

HotIgneous Intruder: Go ahead, buy into the oligarchic model.
They depend on deeply programmed obedient people to stay in power.
Keep swallowing their propaganda jiz and keep smiling afterward.
When it's your kid or parent or loved one who is suffering you won't be so callow and glib.



Ok, you convinced me.
 
2012-07-18 05:54:06 PM
You sound all hoop-de-doofey.

It's not the data that's the problem. It's the bending data to serve political purposes that is the problem.
Bet your obsequious ass that this drivel will turn up in the right wing talking points as hardened truth.

Of course, the implication here is that only a social and intellectual of equal or greater rank than an Ivy League department head can critique such nonsense. That's a very hierarchical and authoritarian-follower point of view and falls right in line as another reason Why We Suck.

I hope this arse-licking turns out great for you guys.
Send me a letter and let me know how it turns out for you.
 
2012-07-18 05:54:19 PM
Cinaed


Buffalo77: uh, no it doesn't.

The most surprising fact to me was that the effective tax rate is negative for the middle quintile. According to the CBO data, this number was +14 percent in 1979 (when the data begin) and remained positive through 2007. It was negative 0.5 percent in 2008, and negative 5 percent in 2009. That is, the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess. ~FTA

It fell between 79 and 07. Then shot in the head Old-Yeller-style during the Financial meltdown. What variables would you say have had a hand in that?


Exactly the one's I pointed out. As much as I hate examples say a couple is middle class making 100,000 and pay 15000 per year in taxes. He loses his job in financial meltdown and collects unemployment of $30000 per year. This results in their taxes dropping to 9000 per year but because of the unemployment benefit they went from +15000 to -21000. Or one person in couples retire or both retire and earn 60000 in retirement benefits but now receive SSI and medicare. This is what happens when society starts living longer and the benefits are not means tested or the retirement age pushed back. Couple that with high unemployment and rise in disability claims and this is how the middle 20% can go negative on net transfer.

This discussion is cash given vs cash received from gov't. You remember back in 2009 the target child tax credit (can't remember exact name). It allowed people who paid no income tax to get back something like $3000 for every child they had. Mother of four, no income, not tax got $12000 back in refund check. That credit expired 2011 I believe.
 
2012-07-18 06:00:03 PM
 
2012-07-18 06:03:47 PM

HotIgneous Intruder: You sound all hoop-de-doofey.


Your argument that someone is dumb would be better if you could explain why he's dumb. The walk-out you posted cited his bias as a reason. Of course his class is biased. He wants students to learn economics and not the fantasyland version that they wanted to learn.
 
2012-07-18 06:10:03 PM

HotIgneous Intruder: Even Greg Mankiw's beginning students walked out on him because of his twisted, myopic perspective.


You may have missed out that the main reason some of those students walked out:

We are walking out today to join a Boston-wide march protesting the corporatization (sic) of higher education as part of the global Occupy movement.

Unless Karl Marx or Mao Zedong was teaching that class, those students would have walked out on any professor there.
 
2012-07-18 06:32:28 PM

Buffalo77: Wealth is created by people's own hard work and wits



Ah yes the hard work of the stock market, legalized gambling.

But keep farking that chicken.

Apparently nobody working for the government creates wealth either.

/libertarians need to go back to school and learn about the Gilded Age
 
2012-07-18 06:33:04 PM

Buffalo77: part of the obstacles of making a successful business are complying with all the gov't regulations.



Like having to spend 10,000 on a shower amiright?
 
2012-07-18 06:33:17 PM
Full disclosure on our boy Greg:
snip...
"From 2003 to 2005, Mankiw was chairman of the Council of Economic Advisers under President George W. Bush. In 2006, he became an economic adviser to Mitt Romney and continued during Romney's 2012 presidential bid."
 
2012-07-18 06:35:48 PM

GasDude: Unless Karl Marx or Mao Zedong was teaching that class, those students would have walked out on any professor there.


But it was Greg Mankiw, so there's that.

/White knighting a former George Dumbya Bush lackey? Really?
//Keep farking that chicken and maybe they'll let you cook it later, dude.
 
2012-07-18 06:51:43 PM
Good link subby, very interesting. As mankiw and thomps observed, the data isnt perfect (temporary spending contributed to the 2009 data, and widening income distribution played a part in the shift), but it is interesting to note how much the wealthy subsidize the non wealthy, and how it has increased since the 1970s

Also, to those thinking other expenses should be included- it would make the data look even worse if education/interest on debt/police etc were included. the bottom quintile has a negative 301% now, how much worse would it be if you included the cost of their police protection,
childrens education, etc?

But that said, it's an imperfect metric but interesting to read anyway.
 
2012-07-18 07:12:30 PM

Buffalo77: This just proves the fallacy that we can tax rich people more to get out of the fiscal mess we are in, they pay 94% of the taxes already.


It proves... the fallacy?
 
2012-07-18 07:17:44 PM

Buffalo77: This discussion is cash given vs cash received from gov't.


Yes, and your rambling does explain away the horrific nose-dive of 2009. Not the slow consistent drop from 1979 to 2008.

Any thoughts on 29 years of economic growth yet a decreasing contribution of the middle 20%?
 
2012-07-18 07:29:39 PM
If I get 3 bucks from the government for every dollar I earn in transfer payments, I should own my own house and a car less than 5 years old. Hell if I were getting $0.42 for every dollar I earned, I'd be rolling in it. Right now it's closer to $0.17 for every dollar. Oh yeah, I'm also both a full time employee and college student.
Bottom line, citation farking needed, because this looks like bullshiat to me.

/off to my freaking garden
//some of us actually don't like being on the dole.
 
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