Jared Bernstein Tilts His Tax Facts

Former Obama administration economist, Jared Bernstein, argues for higher taxes in a New York Times op-ed yesterday. His piece begins:

Like it or not, the campaign season is upon us, and that almost certainly means somebody is going to try to buy your vote with a tax cut — even though average federal tax rates are already low in historical terms, our tax code remains tilted in favor of the wealthy, and our children, neighborhoods and infrastructure desperately need public investment.

I tried to use my imagination and think of how a thoughtful and intelligent liberal like Bernstein might conceive of tax policy. But I could not come up with any scenario under which this statement might be considered true: “our tax code remains tilted in favor of the wealthy.”   

The plain fact of the matter is that the federal tax system is highly graduated, or what liberals call “progressive.” Lower-income households pay much smaller shares of their income in taxes than do higher-income households.

In his article, Bernstein uses data from the respected Tax Policy Center (TPC), as I do here. The first table shows TPC estimates of average federal tax rates (total taxes divided by income) for U.S. households (specifically, “tax units”) in five income groups.

King v. Burwell: How the Supreme Court Helped President Obama Disenfranchise His Political Opponents

Criticizing my recent post-mortem on King v. Burwell, Scott Lemieux kindly calls me “ObamaCare’s fiercest critic” for my role in that ObamaCare case. Other words he associates with my role include “defiant,” “ludicrous,” “farcical,” “dumber,” “snake oil,” “ludicrous” (again), “irrational,” “aggressive,” “comically transparent,” and “dishonest.”

Somewhere amid the deluge, Lemieux reaches his main claim, which is that (somehow) I admitted: “the King lawsuit wasn’t designed to uphold the statute passed by Congress in 2010. It was intended to ‘enfranchise’ the people who voted against the bill.” I’m not quite sure what Lemieux means. But perhaps Lemieux doesn’t understand my point about how the Supreme Court helped President Obama disenfranchise his political opponents.

As all nine Supreme Court justices acknowledged in King, “the most natural reading of the pertinent statutory phrase” is that Congress authorized the Affordable Care Act’s premium subsidies, employer mandate, and (to a large extent) individual mandate only in states that agreed to establish a health-insurance “Exchange.” That is, all nine justices agreed that the plain meaning of the operative statutory language allows states to veto key provisions of the ACA—sort of like the Medicaid veto that has existed for 50 years and lets states destroy health insurance for millions of poor Americans. The Exchange veto includes the power to shield millions of state residents from the ACA’s least-popular provisions: the individual mandate and the employer mandate.

You Ought to Have a Look: Highlights from the House Hearing on Social Cost of Carbon

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  Here we post a few of the best in recent days, along with our color commentary.

In case you missed it the House Natural Resources Committee, this week, held a hearing examining the Administration’s determination of the social cost of carbon—that is, how much future damage (out to the year 2300) the Administration deems is caused by the climate change that results from each emitted (metric) ton of carbon dioxide.

As you may imagine from this description, determining a value of the social cost of carbon is an extremely contentious issue, made more so by the fact that the Obama Administration requires that the social cost of carbon, or SCC, be included in the cost/benefit analysis of all federal actions (under National environmental Protection Act, NEPA) and proposed regulations.

Years ago, we warned about how powerful a tool the SCC was in the Administrations hands and have worked to raise the level of public awareness. To summarize our concerns:

The administration’s SCC is a devious tool designed to justify more and more expensive rules and regulations impacting virtually every aspects of our lives, and it is developed by violating federal guidelines and ignoring the best science.

The more people know about this the better.

Our participation in the Natural Resources Committee hearing helped further our goal.

That the hearing was informative, contentious, and well-attended by both the committee members and the general public is a testament to the fact that we have been at least partly successful elevating the SCC from an esoteric “wonky” subject to one that is, thankfully, starting getting the attention it deserves.

In this edition of You Ought to Have a Look, we highlight excerpts from the hearing witnesses, which along with our Dr. Patrick Michaels, included Dr. Kevin Dayaratna (from The Heritage Foundation), Scott Segal (from the Policy Resolution Group) and Dr. Michael Dorsey (from US Climate Plan).  The full written submissions by the witness are available here.

Third Greek Bailout Is Not the Charm

Nearly a month ago Greek voters rejected more economic austerity as a condition of another European bailout. Today Athens is implementing an even more severe austerity program.

Few expect Greece to pay back the hundreds of billions of dollars it owes. Which means another economic crisis is inevitable, with possible Greek exit (“Grexit”) from the Eurozone.

Blame for the ongoing crisis is widely shared. Greece has created one of Europe’s most sclerotic economies. The Eurocrats, an elite including politicians, journalists, businessmen, and academics, determined to create a United States of Europe irrespective of the wishes of European peoples.

European leaders welcomed Athens into the Eurozone in 2001 even though everyone knew the Greek authorities were lying about the health of their economy. Economics was secondary.

Unfortunately, equalizing exchange rates cemented Greece’s lack of international competitiveness. Enjoying an inflated credit rating, Greece borrowed wildly and spent equally promiscuously on consumption.

Greece could have simply defaulted on its debts. However, Paris and Berlin, in particular, wanted to rescue their improvident banks which held Athens’ debt.

Thus, in return for tough loan conditions most of the Greek debt was shifted onto European taxpayers through two bail-outs costing roughly $265 billion. Greece’s economy has suffered, and the leftwing coalition party Syriza won Greece’s January election. Impasse resulted at the end of June as the second bailout expired.

Real and Pseudo Free Banking

Like certain weeds and infectious diseases, some myths about banking seem beyond human powers of eradication.

I was reminded of this recently by a Facebook correspondent’s reply to my recent post on “Hayek and Free Banking.” “We had free banking in the US from 1830 until 1862,” he wrote. “It didn’t work out too well.” “During the Wildcat Era,” he added, “banks were unregulated and failed by the hundreds.”

Imagine the effect my critic must have anticipated — the crushing blow his revelations would surely deal to my cherished beliefs. Upon reading his words, my eyes widen; my jaw goes slack. Can this really be so?, I ask myself? I read the ominous sentences again, more slowly, sub-vocalizing. Beads of sweat gather across my brow. Then, pursing my lips, my eyes downcast, I turn my head, first left, then right, then left again. If only I had known! All these years…no one ever…I mean, how was I supposed…it never occurred to me… DARNITALL! Why didn’t I think of looking at the U.S. experience before shooting my mouth off about free banking?

Well, that isn’t what happened. “What cheek this fellow has!” was more like it. (OK, it wasn’t exactly that, either.) Of course I’ve looked into the U.S. record. So has Larry White. And Kevin Dowd. And every other dues-paying member of the Modern Free Banking School. We’ve looked into it, and we’ve found nothing there to change our minds concerning the advantages of freedom in banking.

An Unnecessary Indictment of Dylann Roof

Today, the Justice Department indicted Dylann Roof on 33 federal hate crime charges for the killings of nine people at Emanuel A.M.E. church in Charleston last month. This indictment is entirely unnecessary.

Hard as it may be for some to imagine now, there was a long time in this country when racially and politically motivated violence against blacks was not prosecuted by state and local authorities. Or sometimes, as in the case of Emmett Till—the young boy from Chicago who was lynched in Mississippi for allegedly being too forward with a white woman—prosecution was a farce and the perpetrators were acquitted.

How Capitalism Is Undermining the Indian Caste System

Karl Marx was wrong about many things but right about one thing: the revolutionary way capitalism attacks and destroys feudalism. As I explain in a new study,  in India, the rise of capitalism since the economic reforms of 1991 has also attacked and eroded casteism, a social hierarchy that placed four castes on top with a fifth caste—dalits—like dirt beneath the feet of others. Dalits, once called untouchables, were traditionally denied any livelihood save virtual serfdom to landowners and the filthiest, most disease-ridden tasks, such as cleaning toilets and handling dead humans and animals. Remarkably, the opening up of the Indian economy has enabled dalits to break out of their traditional low occupations and start businesses. The Dalit Indian Chamber of Commerce and Industry (DICCI) now boasts over 3,000 millionaire members. This revolution is still in its early stages, but is now unstoppable.