The Optimal Tax | Dollars & Sense

Source: The Optimal Tax | Dollars & Sense

Up Against the Wall Street Journal

The Optimal Tax

Mainstream economics supports a 70% top income tax rate.

BY JOHN MILLER | May/June 2019

This week Paul Krugman leapt to the defense of Democratic freshman Rep. Alexandria Ocasio-Cortez’s idea of paying for a “Green New Deal” with a 70% marginal tax rate on the incomes of top earners.

Mr. Krugman cites a 2011 paper by Peter Diamond and Emmanuel Saez, based on a variety of extrapolations, [which] calculates that the “optimal” top tax rate is 73%. Case closed? Not even slightly. Messrs. Saez and Diamond are describing a world in which the wealthy have no opportunity to shield or hide their incomes.

Politicians may find it politically handy to be seen dinging the rich. The net result isn’t more revenue. It’s more efficiency-inhibiting economic distortions.

—Holman Jenkins, “High Tax Rates Aren’t Optimal: Nobody Really Thinks a Top Rate of 70% or 80% is a Good Idea in the Real World,” Wall Street Journal, Jan. 8, 2019.

We have been down this road before. In the 2016 presidential election Bernie Sanders proposed a top income tax rate of 70% to reduce our ever-worsening levels of inequality and help to finance social programs that would support those left behind by today’s economy. In response, a cavalcade of economic commentators lined up to denounce Sanders’ proposal as socialist lunacy sure to bring on an economic disaster.

But that’s not at all what the historical evidence shows. Sanders suggested as much when he quipped that he hadn’t proposed a 90% top income tax because “I’m not that much of a socialist compared to Eisenhower.” Economist Paul Krugman made the same point in his New York Times column that Wall Street Journal columnist Holman Jenkins found so objectionable: The top income tax bracket in the United States was higher than 70% “for 35 years after World War II—including the most successful period of economic growth in our history.” But Krugman’s defense of Rep. Alexandria Ocasio-Cortez’s (AOC’s) proposed 70% top income tax rate to help finance a Green New Deal did not stop there. He invoked the “optimum” income tax rate—a concept firmly entrenched in the canon of economic tax literature. As I explain below, calculations of this optimum tax show that the U.S. income tax could be highly progressive with a top income tax rate of 73% or higher without reducing government tax revenues.

That’s what really got Jenkins’ goat. To see why the optimal top income tax rate is as high as 70%, and probably higher, despite Jenkins’ objections, we’ll need to unpack some of the economics tax literature.

Read More

issue 342 cover

This article is from the
May/June 2019 issue.

Subscribe Now at a 30% discount

Nancy Pelosi’s renewed attacks on AOC aren’t just disrespectful, they’re dangerous

| Arwa Mahdawi | Opinion | The Guardian

Source: Nancy Pelosi’s renewed attacks on AOC aren’t just disrespectful, they’re dangerous | Arwa Mahdawi | Opinion | The Guardian

Can progressives please shut up and listen to Nancy Pelosi? The speaker of the House, I would like to remind everyone, is a master strategist, a savvy tactician, and an experienced politician. She knows what’s best for America. And what’s best for America, apparently, isn’t standing up to Donald Trump; no, it’s ensuring four freshman congresswomen don’t get ideas above their station. It’s ensuring Alexandria Ocasio-Cortez, in particular, knows her place.

There have been long-running tensions between Pelosi and the so-called “Squad” of new progressive congresswomen, which consists of Ocasio-Cortez, Ilhan Omar, Rashida Tlaib and Ayanna Pressley. Things escalated sharply over the weekend, when Pelosi decided it would be a good idea to demean her colleagues in the New York Times. “All these people have their public whatever and their Twitter world, but they didn’t have any following,” Pelosi told the Times, referring to a border funding bill the Squad opposed. “They’re four people, and that’s how many votes they got.”

To begin with, Pelosi’s disparaging remarks about the Squad seemed like they were probably strategic. Now, however, the sustained attacks feel increasingly personal. “When these comments first started, I kind of thought that she was keeping the progressive flank at more of an arm’s distance in order to protect more moderate members, which I understood,” Ocasio-Cortez told the Washington Post on Wednesday. “But the persistent singling out … it got to a point where it was just outright disrespectful … the explicit singling out of newly elected women of color.”

AOC expanded on her comments on Thursday, telling CNN she “absolutely” doesn’t think Pelosi is racist. “It’s really just pointing out the pattern, right? We’re not talking about just progressives, it’s signaling out four individuals. And knowing the media environment that we’re operating in, knowing the amount of death threats that we get … I think it’s just worth asking why.”

As Ocasio-Cortez notes, Pelosi’s attacks aren’t taking place in a bubble; they’re taking place in a media environment where the rightwing have put a target on the Squad’s back. On Tuesday night, for example, Fox host Tucker Carlson launched a racist attack against Omar that could arguably be seen as an incitement to violence against the congresswoman. “[Omar] has undisguised contempt for the United States and for its people,” Carlson told his 3 million viewers. “That should worry you, and not just because Omar is now a sitting member of Congress. Ilhan Omar is living proof that the way we practice immigration has become dangerous to this country. A system designed to strengthen America is instead undermining it.”

Read the rest: Nancy Pelosi’s renewed attacks on AOC aren’t just disrespectful, they’re dangerous | Arwa Mahdawi | Opinion | The Guardian

Bernie Versus the Establishment? | Dissent Magazine

The primary field isn’t polarized between left and center as clearly as it was in 2016. But Sanders is still the only candidate who tells us, over and over, that we need more than a good president.

Source: Bernie Versus the Establishment? | Dissent Magazine

Elizabeth Warren’s sincere reformism has narrowed the political territory Bernie can claim as his own, as have the far less sincere promises of other candidates who have leaned into the leftward movement of the party’s base. Sanders also struggles with the desire of some voters to nominate someone who isn’t a white man—a desire that’s especially understandable in the face of a sitting president with violent misogynist and racist instincts. Biden, meanwhile, leads the cause of restoration, but is also contending with a handful of conservative Democrats in his corner.

Who Can Lead a More Progressive Party? | Dissent Magazine

The ironic consequence of Sanders’s 2016 campaign is that most Americans now have a difficult time understanding how his socialism differs from the stands taken by other progressive candidates.

▪ June 28, 2019

Source: Who Can Lead a More Progressive Party? | Dissent Magazine

And although I share many of Bernie Sanders’ positions, he increasingly comes across as a humorless shouter who, like Biden, refuses to admit he ever did or said anything he now regrets. His response on gun control was a prime example of that. Bernie’s 2016 campaign will be remembered—and hailed—for helping push the party to the egalitarian, social democratic left. But the ironic consequence of his glorious challenge is that most Americans will now have a difficult time understanding how his “socialism” differs from the stands taken by Elizabeth Warren, Julián Castro, and even Harris—all of whom can deliver a facsimile of it without hectoring their audiences.

Biden hints at mild criticism of Israel — then slams Palestinians as obstacle to peace

Joe Biden and Pete Buttigieg hint at mild criticisms of Israel in comments to the American Jewish Committee while Cory Booker avoids the topic. Biden said American friends have to be honest with Israel before using the opportunity to criticize Palestinians: They have to be ready to negotiate. They have to be ready to recognize a two-state solution as the only way forward.

Source: Biden hints at mild criticism of Israel — then slams Palestinians as obstacle to peace

In messages to Jewish org, Kamala Harris mentions Israel 14 times, Tulsi Gabbard 0

Senator Kamala Harris is seeking to separate herself from the Democratic field by being an unapologetic booster of Israel. Her message to the AJC yesterday contains a vow– I will do everything in my power to insure broad and bipartisan support for Israel’s security and right to self-defense — but not a word of criticism of the democratic and Jewish state.

Source: In messages to Jewish org, Kamala Harris mentions Israel 14 times, Tulsi Gabbard 0

Bernie Sanders and Palestine | Portside

We’ve closely followed the statements of Democratic presidential hopefuls to the American Jewish Committee. Almost every candidate so far has been careful to skirt the Israel question, hinting at some mild criticism of Israel but not actually voicing it. Joe Biden went after the Palestinians. Kamala Harris embraced Israel. No one has mentioned the occupation or Palestinian human rights with any specificity.

Source: Bernie Sanders and Palestine | Portside

Bernie Sanders to Military Industrial Complex: We Will Not Continue To Spend $700 Billion Per Year On War | Video | RealClearPolitics

At a campaign rally Saturday in Burlington, Vermont, Sen. Bernie Sanders outlined his anti-war foreign policy, saying: “I make no apologies for trying to do everything that I can to make sure this country does not get into another war in the Middle East.” “Recently I have been attacked in the media because of my views, actions, and votes on foreign policy issues,” Sanders said. “So let me be as clear as I can be. Yes, as a young man, along with Dr. Martin Luther King Jr and others, I marched against the war in Vietnam… As a member of the House of Representatives, I helped lead the opposition to the war in Iraq… As a member of the Senate recently, I am proud to have been the lead sponsor on a resolution that, for the first time in 45 years, utilized the War Powers Act to get a majority vote in the House and the Senate to get the United States out of the horrific Saudi-led intervention in Yemen… And finally, right now, this minute, I am doing everything that I can, working, by the way, with some honest conservatives in the Senate, to prevent Donald Trump and John Bolton from taking us into a war in Iran.” SEN. BERNIE SANDERS: But it’s not just Wall Street and the drug compani

Source: Bernie Sanders to Military Industrial Complex: We Will Not Continue To Spend $700 Billion Per Year On War | Video | RealClearPolitics

[Letter from Washington] No Joe! Harper’s Magazine

Joe Biden’s disastrous legislative legacy

Source: [Letter from Washington] No Joe! | Harper’s Magazine

By Andrew Cockburn

In the heart of the US Capitol there’s a small men’s room with an uplifting Franklin Delano Roo­sevelt quotation above the door. Making use of the facilities there after lunch in the nearby House dining room about a year ago, I found myself standing next to Trent Lott. Once a mighty power in the building as Senate Republican leader, he had been forced to resign his post following some imprudently affectionate references to his fellow Republican senator, arch-segregationist Strom Thurmond. Now he was visiting the Capitol as a lucratively employed lobbyist.

The bathroom in which we stood, Lott remarked affably, once served a higher purpose. History had been made there. “When I first came to Washington as a junior staffer in 1968,” he explained, “this was the private hideaway office of Bill Colmer, chairman of the House Rules Committee.” Colmer, a long-serving Mississippi Democrat and Lott’s boss, was an influential figure. The committee he ruled controlled whether bills lived or died, the latter being the customary fate of proposed civil-rights legislation that reached his desk. “On Thursday nights,” Lott continued, “he and members of the leadership from both sides of the House would meet here to smoke cigars, drink cheap bourbon, play gin rummy, and discuss business. There was a chemistry, they understood each other. It was a magical thing.” He sighed wistfully at the memory of a more harmonious age, in which our elders and betters could arrange the nation’s affairs behind closed doors.

2020 Democratic Candidates Taking Lobbyist Donations Despite Pledges

Many major Democratic presidential candidates pledged not to take special-interest money — but, with a raft of loopholes, the money is still pouring in.

Source: 2020 Democratic Candidates Taking Lobbyist Donations Despite Pledges

Lee Fang
April 17 2019, 5:27 p.m.

All of the Democratic presidential candidates have committed to rejecting the influence of special interests. To demonstrate their resolve, several of the candidates have promised to power their White House ambitions without a single dollar of lobbyist money.

In the waves of small-dollar donations reported on Monday — the first financial disclosure reporting period of the 2020 presidential race — lobbyist money had made its way into the coffers of major candidates’ campaigns.

Beto O’Rourke is one of the candidates who had pledge to run a campaign financed only by regular people — “not PACs, not lobbyists, not corporations, and not special interests.” His latest filing, however, shows that he accepted donations from a federal utility-company lobbyist and a top Chevron lobbyist in New Mexico.

Some lobbyist cash comes from individuals who are clearly lobbyists but have chosen not to register with a federal system rife with loopholes.

Sen. Kamala Harris, D-Calif., has also collected donations from registered corporate lobbyists in South Carolina, New York, and California. Several technology lobbyists from San Francisco have given to her campaign. Another Harris donor, Robert Crowe, from the firm, Nelson Mullins Riley & Scarborough, is a federal lobbyist who has worked to influence Congress on behalf of pipeline firm EQT Corporation and Alphabet, the parent company of Google.

Sen. Cory Booker, D-N.J., similarly announced that he would eschew campaign donations from federal lobbyists, and his campaign appears to be making most of the caveat about “federal” lobbyists. Though he has returned donations from lobbyists registered under the federal government’s system, Booker has taken half a dozen donations from lobbyists registered under state and municipal lobbyist registration laws, but who do not appear in federal disclosures.

As Joe Biden Hints at Presidential Run, Andrew Cockburn Looks at His “Disastrous Legislative Legacy” | Democracy Now!

Speculation is mounting that former Vice President Joe Biden will soon enter the race for the Democratic presidential nomination. As a longtime senator from Delaware, Biden has previously run twice for the Democratic nomination. The last time was in 2008, when he ultimately became then-Senator Barack Obama’s running mate. While a new campaign would seek to capitalize on Biden’s two terms as vice president, it would also invite scrutiny of his Senate record in a Democratic political climate that is notably more progressive today than it was when Biden last sought the nomination. We speak with Andrew Cockburn, Washington editor for Harper’s magazine. His latest piece is headlined “No Joe! Joe Biden’s disastrous legislative legacy.”

Source: As Joe Biden Hints at Presidential Run, Andrew Cockburn Looks at His “Disastrous Legislative Legacy” | Democracy Now!

Joe Biden: “I don’t think 500 billionaires are the reason why we’re in trouble.” – RootsAction

“I love Bernie, but I’m not Bernie Sanders. I don’t think 500 billionaires are the reason why we’re in trouble… The folks at the top aren’t bad guys.”
– Joe Biden, speaking to the Brookings Institution
(5-9-18)

Source: Joe Biden: “I don’t think 500 billionaires are the reason why we’re in trouble.” – RootsAction

Joe Biden at podium

“Guys, the wealthy are as patriotic as the poor. I know Bernie doesn’t like me saying that, but they are.”
– Joe Biden, speaking in Alabama
(10-3-17)

“Biden voted for repeated rounds of deregulation in multiple areas and helped roll back anti-trust policy – often siding with Republicans in the process. He was a key architect of the infamous 2005 bankruptcy reform bill which made means tests much more strict and near-impossible to discharge student loans in bankruptcy.”
– Journalist Ryan Cooper, The Week
(3-20-19)

An Independence Day Alternative

How the “enlightened” leaders of the early US disregarded an Independence Day oration and set in motion indigenous peoples’ brutalization. 

Source: An Independence Day Alternative

Cherokee arrive in Oklahoma following the Trail of Tears. Dorothy Sullivan

Sample first page.

Two hundred and twenty-two years ago today (1797) , in a field near what’s now Greenville, Ohio, a preacher named John Rhys delivered an Independence Day address to the United States Army.

The troops in his audience had recently won a decisive victory over the Western Confederacy, an alliance of Native peoples who’d been battling white encroachment in the Midwest for a decade. That victory had brought to an end the first Indian war of the federal era. More than a thousand white Americans had been killed, and perhaps twice that number of Native Americans.

Native leaders expected that defeat would mean a permanent expulsion from their lands. But Reverend Rhys took a different line. “The love of conquest and enlargement of territory should be sacrificed,” he told the troops. “Whites and Indians should move to each other’s towns, get to know each other better, perhaps even fall in love.” When they recognized their mutual humanity, he insisted, they would become “one people, and have but one interest at heart.”

It’s easy to see the relationship between white people and Native Americans in early US history as a zero-sum game: the United States gave national form to a practice of settler colonialism that had marginalized Native people for centuries; the interests of white settlers who pushed forward into Indian country after 1776 were fundamentally opposed to those of Native Americans.

And in their broad outline, these assumptions are correct. From George Washington to Andrew Jackson (and beyond), America’s presidents had little regard for the wellbeing of Native people. But Rhys’s Independence Day oration points to a very different outcome, free of mass murder and terror.

Kamala Harris Stopped Cooperation With San Francisco Church Sex Abuse Victims

Thanks to Kamala Harris’s predecessor, the San Francisco DA’s office had files on clergy sex abusers. But Harris refused to share them with victims.

Source: Kamala Harris Stopped Cooperation With San Francisco Church Sex Abuse Victims

Video by Leighton Akio Woodhouse

Sample first page.

Kamala Harris, surrounded by thousands of cheering supporters, kicked off her presidential campaign in Oakland earlier this year, declaring that she has always fought “on behalf of survivors of sexual assault, a fight not just against predators but a fight against silence and stigma.”

Fighting on behalf of victims of sexual abuse, particularly children, has been central to Harris’s political identity for the better part of three decades. Harris specialized in prosecuting sex crimes and child exploitation as a young prosecutor just out of law school. She later touted her record on child sexual abuse cases and prosecuting pedophiles in television advertisements, splashy profiles, and on the trail as she campaigned for public office.

But when it came to taking on the Catholic Church, survivors of clergy sexual abuse say that Harris turned a blind eye, refusing to take action against clergy members accused of sexually abusing children when it meant confronting one of the city’s most powerful political institutions.

When Harris became San Francisco district attorney in 2004, she took over an office that had been working closely with survivors of sexual abuse to pursue cases against the Catholic Church. The office and the survivors were in the middle of a legal battle to hold predatory priests accountable, and Harris inherited a collection of personnel files involving allegations of sexual abuse by priests and employees of the San Francisco Archdiocese, which oversees church operations in San Francisco, and Marin and San Mateo counties.

All About Pete | Current Affairs

Source: All About Pete | Current Affairs

Only accept politicians who have proved they actually care about people other than themselves… by Nathan J. Robinson

Sample first page.

Pete Buttigieg, the mayor of South Bend, Indiana, is being hyped as the “Democratic celebrity” of the moment. Buttigieg has been the subject of buzz since 2014, when the Washington Post called him “the most interesting mayor you’ve never heard of.” Now, Buttigieg is running for president, and headlines are appearing in New York and the New York Times like “Could Pete Buttigieg Become the First Millennial President?” and “The First Gay President?” Barack Obama has mentioned Buttigieg as one of the rising stars of the Democratic Party, he appeared at a well-received CNN town hall, FiveThirtyEight is charting his possible paths to the nomination (complete with inscrutable diagrams), and Buttigieg has been rising in the polls (even placing third in an Iowa poll after Biden and Sanders). He is still considered a long-shot. He’s only 37, and no one has ever gone directly from being a mayor to being a president, let alone the mayor of a city half the size of Boise. But of course, we live in strange times, and nobody had ever gone from firing D-list celebrities on a reality show to being president either, so if there’s one thing we should expect, it’s the unexpected.

If you know only one thing about Pete Buttigieg, it’s that he’s The Small-Town Mayor Who Is Making A Splash. If you know half a dozen things about Pete Buttigieg, it’s that he’s also young, gay, a Rhodes Scholar, an Arabic-speaking polyglot, and an Afghanistan veteran. If you know anything more than that about Pete Buttigieg, you probably live in South Bend, Indiana. This is a little strange: These are all facts about him, but they don’t tell us much about what he believes or what he advocates. The nationwide attention to Buttigieg seems more to be due to “the fact that he is a highly-credentialed Rust Belt mayor” rather than “what he has actually said and done.” He’s a gay millennial from Indiana, yes. But should he be President of the United States?

The New Deal in the American Political Imagination | Portside

We are in a new era to which I do not belong.” So confided ex-president Calvin Coolidge to a close friend on a cold December day in 1932. He punctuated that melancholic thought a few weeks later by dying. Coolidge was right. Within months of his death, the New Deal would begin the recreation of the American political universe. From that moment to this one, the New Deal has served as the ground zero of the country’s political imagination. It is the Rosetta stone for understanding every enduring political development of the last seventy-five years.

Source: The New Deal in the American Political Imagination | Portside

Kamala Harris Says She Was a Progressive Prosecutor. Her Record Tells Another Story | Democracy Now!

As Senator Kamala Harris rises in the early presidential polls, she is facing increasing scrutiny over her record as a prosecutor in California. In 2004, Harris became district attorney of San Francisco. She held the post until 2011, when she became the attorney general of California. We speak with Lara Bazelon, a professor at the University of San Francisco School of Law. In January, she wrote a piece in The New York Times titled “Kamala Harris Was Not a ‘Progressive Prosecutor.’” In it, Bazelon writes, “Time after time, when progressives urged her to embrace criminal justice reforms as a district attorney and then the state’s attorney general, Ms. Harris opposed them or stayed silent. Most troubling, Ms. Harris fought tooth and nail to uphold wrongful convictions that had been secured through official misconduct that included evidence tampering, false testimony and the suppression of crucial information by prosecutors.”

Source: Kamala Harris Says She Was a Progressive Prosecutor. Her Record Tells Another Story | Democracy Now!

America’s Indefensible Defense Budget | by Jessica T. Mathews | The New York Review of Books

The sheer size of the military establishment and the habit of equating spending on it with patriotism make both sound management and serious oversight of defense expenditures rare. As a democracy, we are on an unusual and risky path. For several decades, we have maintained an extraordinarily high level of defense spending with the support of both political parties and virtually all of the public. The annual debate about the next year’s military spending, underway now on Capitol Hill, no longer probes where real cuts might be made (as opposed to cuts in previously planned growth) but only asks how big the increase should be.

Source: America’s Indefensible Defense Budget | by Jessica T. Mathews | The New York Review of Books

The Road Taken | by Caroline Fraser | The New York Review of Books

Pete Buttigieg’s campaign memoir, Shortest Way Home: One Mayor’s Challenge and a Model for America’s Future, introduces the candidate by heavily emphasizing his hometown ties. In it, he seems bent on leveraging his midwestern values, giving the strong sense of being almost radically wholesome. He does this by presenting, in an astounding act of compression, a life packed like a Marie Kondo underwear drawer full of neatly folded accomplishments, all achieved with apparent effortlessness.

Source: The Road Taken | by Caroline Fraser | The New York Review of Books

I Was Sexually Harassed on Sanders’s 2016 Campaign.

Accusations of sexual misconduct should not be weaponized to serve a political agenda. Nor should claims be ignored to protect a beloved candidate.

Source: I Was Sexually Harassed on Sanders’s 2016 Campaign.

As was the case throughout the 2016 campaign season, my personal experiences as a woman of color were sublimated to serve an establishment media narrative that pretends the progressive movement is all white, all male, and runs counter to the interests of women and people of color.But my story should not be taken to confirm the “Bernie bro” mythology. It should be taken to confirm the pervasiveness of sexism in professional life and distill the hard truths that all campaigns should learn from.”

The “Bernie Bros” Narrative: a Cheap Campaign Tactic Masquerading as Journalism and Social Activism

The fact that it may be an effective political smear does not make it any less ugly or deceitful.

Source: The “Bernie Bros” Narrative: a Cheap Campaign Tactic Masquerading as Journalism and Social Activism

Interesting article about vitriolic, sexist, racist, homophobic online comments made by others towards others, and how they can be used by the media or campaigns to smear well known people such as Bernie. The same tactic was used against Jeremy Corbyn in Great Britain. This article also makes reference to policy positions of HRC with comments made by Michelle Alexander and Ta-Nehisi Coates:” Jo Cummings

How to Win

Without unions to institutionalize them, waves of activism dissipate. As the nation and the labor movement shift to the left, progressives need to push forward policies and politics that strengthen those working-class organizations.

The 2018 election reinforced the critical role unions play in electing progressive, pro-worker candidates. In Michigan and Pennsylvania, union-household voters made up 25 percent of the electorate and helped sweep Democrats to victory up and down the ballot. And as the presidential campaign heats up, Democratic candidates are competing with each other to stake out policy terrain on the left. Elizabeth Warren and Bernie Sanders have both put forward programs that borrow from both European social democracy (worker representatives on corporate boards, universal health provision) and FDR’s early New Deal (higher taxes on the rich, massive infrastructure spending, higher social security benefits, and the reregulation of Wall Street).

But, on the other hand, this moment is also a long “winter of despair” when it comes to a revival of trade unionism and collective bargaining, especially in the private sector, where union density is a vanishingly small 6.4 percent. Despite the remarkable victory of union school teachers in California and elsewhere and the inspiring success of union hotel workers, nurses, and a few other militant labor organizations, the union movement remains essentially stalemated in the private sector, certainly when it comes to making the kind of organizing breakthroughs and qualitative bargaining advances that were a hallmark of labor activism between 1934 and 1973. Unemployment is low, wages are barely advancing, unions are viewed in a quite favorable light, and a new generation of young and energetic organizers have been hired onto union staffs, but it still remains incredibly difficult to organize new workers or win a decent first contract. …

Nelson Lichtenstein

▪ Read article atDissent Magazine Spring 2019