Editorial | Charity Won’t Solve Student Debt – The New York Times

“Around the turn of the last century, the steel magnate Andrew Carnegie paid to build 1,689 libraries across the United States. Many are still in use, celebrated as monumental works of philanthropy.

They should be seen as monuments to the failure of public policy. The United States could have built a lot more libraries by taxing the incomes of Carnegie and his fellow Gilded Age plutocrats, but, at the turn of the last century, there was no federal income tax.

Now history is repeating itself. A new generation of plutocrats has amassed great fortunes, in part because the federal government has minimized the burden of taxation. Americans once again are reduced to applauding acts of philanthropy necessitated by failures of policy.

Robert Smith, a wealthy financier, announced on Sunday during graduation ceremonies at Morehouse College that he would repay the student loans taken by the 396 men in this year’s graduating class. The promise, which may cost Mr. Smith up to $40 million, was an act of generosity gratefully received by the new graduates of the historically black, all-male Atlanta college.”

Opinion | Congress to I.R.S.: Don’t Even Think of Helping Taxpayers – The New York Times

By The Editorial Board
The editorial board represents the opinions of the board, its editor and the publisher. It is separate from the newsroom and the Op-Ed section.

April 10, 2019, 311
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CreditCreditLuba Lukova
Congress has landed on one of those rare ideas that commands support from both Democrats and Republicans. Unfortunately, it’s a bad one.

“On Tuesday, the House approved legislation misleadingly titled the Taxpayer First Act that includes a provision prohibiting the Internal Revenue Service from developing a free online system that most American households could use to file their taxes. The Senate is considering a similar piece of bipartisan legislation.

This makes no sense. Congress should be making it easier for Americans to file their taxes. Instead of barring the I.R.S. from making April a little less miserable, why isn’t Congress requiring the I.R.S. to create a free tax filing website?

Better yet, the United States could emulate the roughly three dozen countries, including Chile, Japan and Britain, where most taxpayers do not need to fill out tax returns. In some of those countries, the accuracy of tax withholding is sufficient to obviate the annual filing process. In others, the government sends out completed forms to most taxpayers. In Estonia, filing taxes can be done in less than three minutes.”

Opinion | A Dummy’s Guide to Democratic Policy Proposals – The New York Times

By Nicholas Kristof
Opinion Columnist

March 27, 2019, 290
Cory Booker’s proposal to reduce wealth gaps is one of many ideas being put forward by Democrats.
Credit
John Locher/Associated Press

“We in the news media often whack politicians for not being serious about policy. And then we ignore their policy proposals.

So here, in the spirit of orgiastic wonkishness, is my Dummy’s Guide to Democratic Policy Proposals. I write it because something fascinating is underway: After decades of incrementalism, Democrats are now proposing a litany of exciting big ideas.

Here’s my take:

Child allowances are among the best ideas to boost America’s future. They are used very successfully abroad to reduce child poverty. One proposal would give families with children $250 to $300 per month, in the form of a refundable tax credit. Luke Shaefer of the University of Michigan estimates that this would reduce the number of children living in poverty by more than one-third.

This version is called the American Family Act, sponsored by Michael Bennet and Sherrod Brown in the Senate and Rosa DeLauro and Susan DelBene in the House. It is broadly backed by Democrats in the House and the Senate.”

Opinion | How the Upper Middle Class Is Really Doing – By David Leonhardt – The New York Times

By David Leonhardt
Opinion Columnist

Feb. 24, 2019, 871 c

Since 1980, the incomes of the very rich have grown

faster than the economy. The upper middle class

has kept pace with the economy, while the

middle class and poor have fallen behind.

“On one side are people who argue that the bourgeois professional class — essentially, households with incomes in the low-to-mid six figures but without major wealth — is not so different from the middle class and poor. All of these groups are grappling with slow-growing incomes, high medical costs, student debt and so on.

The only real winners in today’s economy are at the very top, according to this side of the debate. When Bernie Sanders talks about “the greed of billionaires” or Thomas Piketty writes about capital accumulation, they are making a version of this case.”

Don’t Fight the Robots. Tax Them. – By Eduardo Porter – The New York Times

By Eduardo Porter
Mr. Porter is an economics writer for The Times.

Feb. 23, 2019

“When Bill Gates floated the idea of imposing a tax on robots a couple of years ago, Lawrence Summers, a former top economic adviser to President Barack Obama, called the Microsoft co-founder “profoundly misguided.” How do you even define a robot to tax it? And taxing innovation is a sure way to make a country poorer. Europe has also rejected the idea. In 2017 the European Parliament soundly defeated a draft motion, proposed by its committee on legal affairs, that recommended considering a tax on the owners of robots to fund retraining programs for workers displaced by the machines and shore up the finances of their social security system.

And yet properly constructed, a tax on automation may not be as destructive as it sounds. South Korea, the most robotized country in the world, instituted a robot tax of sorts in 2018 when it reduced the tax deduction on business investments in automation.

There are two sound arguments for taxing robots. The easiest is this: Governments need the money. In the United States, income taxes account for half of the $3 trillion collected every year by the Internal Revenue Service; payroll taxes account for another third.

Imagine that the fears about robots taking over jobs actually come true. Two years ago, the McKinsey Global Institute found that the job functions that are “most susceptible to automation” in the United States account for 51 percent of the activities in the economy and $2.7 trillion worth of wages. The institute estimates “half of today’s work activities could be automated by 2055.” If that happens, hundreds of billions of tax dollars would be lost every year.”

Elizabeth Warren Wants a Wealth Tax. How Would That Even Work? – By Neil Irwin – The New York Times

By Neil Irwin
Feb. 18, 2019, 129

“When the United States government wants to raise money from individuals, its mode of choice, for more than a century, has been to tax what people earn — the income they receive from work or investments.

But what if instead the government taxed the wealth you had accumulated?

That is the idea behind a policy Senator Elizabeth Warren has embraced in her presidential campaign. It represents a more substantial rethinking of the federal government’s approach to taxation than anything a major presidential candidate has proposed in recent memory — a new wealth tax that would have enormous implications for inequality.

Senator Elizabeth Warren’s plan: a tax on a family’s wealth above $50 million at 2 percent a year, with an additional surcharge of 1 percent on wealth over $1 billion.
Credit
Charlie Neibergall/Associated Press

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Senator Elizabeth Warren’s plan: a tax on a family’s wealth above $50 million at 2 percent a year, with an additional surcharge of 1 percent on wealth over $1 billion.
CreditCharlie Neibergall/Associated Press
It would shift more of the burden of paying for government toward the families that have accumulated fortunes in the hundreds of millions or billions of dollars. And over time, such a tax would make it less likely that such fortunes develop.

It would create big new challenges for the I.R.S. in ensuring compliance. There is a reason many European countries that once had a wealth tax have abandoned it in the last couple of decades.”

Opinion | Elizabeth Warren Does Teddy Roosevelt – By Paul Krugman – The New York Times

Paul Krugman
By Paul Krugman
Opinion Columnist

Jan. 28, 2019, 633 c

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Elizabeth Warren at a campaign event in Iowa early this month.CreditCreditGabriella Demczuk for The New York Times

“America invented progressive taxation. And there was a time when leading American politicians were proud to proclaim their willingness to tax the wealthy, not just to raise revenue, but to limit excessive concentration of economic power.

“It is important,” said Theodore Roosevelt in 1906, “to grapple with the problems connected with the amassing of enormous fortunes” — some of them, he declared, “swollen beyond all healthy limits.”

Today we are once again living in an era of extraordinary wealth concentrated in the hands of a few people, with the net worth of the wealthiest 0.1 percent of Americans almost equal to that of the bottom 90 percent combined. And this concentration of wealth is growing; as Thomas Piketty famously argued in his book “Capital in the 21st Century,” we seem to be heading toward a society dominated by vast, often inherited fortunes.

So can today’s politicians rise to the challenge? Well, Elizabeth Warren has released an impressive proposal for taxing extreme wealth. And whether or not she herself becomes the Democratic nominee for president, it says good things about her party that something this smart and daring is even part of the discussion.”

Opinion | Alexandria Ocasio-Cortez’s Tax Hike Idea Is Not About Soaking the Rich – By Emmanuel Saez and Gabriel Zucman – The New York Times

By Emmanuel Saez and Gabriel Zucman
Mr. Saez and Mr. Zucman are economics professors at the University of California, Berkeley,

Jan. 22, 2019,  515 c

Image: Alexandria Ocasio-Cortez in November. CreditCreditSarah Silbiger/The New York Times
“Alexandria Ocasio-Cortez has kick-started a much-needed debate about taxes. But the debate, so far, has been misplaced. It’s obvious that the affluent — who’ve seen their earnings boom since 1980 while their taxes fell — can contribute more to the public coffers. And given the revenue needs of the country, it is necessary.

But that’s not the fundamental reason higher top marginal income tax rates are desirable. Their root justification is not about collecting revenue. It is about regulating inequality and the market economy. It is also about safeguarding democracy against oligarchy.

It has always been about that. Look at the history of the United States. From 1930 to 1980, the top marginal income tax rate averaged 78 percent; it exceeded 90 percent from 1951 to 1963. What’s important to realize is that these rates applied to extraordinarily high incomes only, the equivalent of more than several million dollars today. Only the ultrarich were subjected to them. In 1960, for example, the top marginal tax rate of 91 percent started biting above a threshold that was nearly 100 times the average national income per adult, the equivalent of $6.7 million in annual income today. The merely rich — the high-earning professionals, the medium-size company executives, people with incomes in the hundreds of thousands in today’s dollars — were taxed at marginal rates in a range of 25 percent to 50 percent, in line with what’s typical nowadays (for instance, in states like California and New York, including state income taxes).

By Emmanuel Saez and Gabriel Zucman
Mr. Saez and Mr. Zucman are economics professors at the University of California, Berkeley,

Jan. 22, 2019, 515 c
Alexandria Ocasio-Cortez in November.

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Alexandria Ocasio-Cortez in November. CreditCreditSarah Silbiger/The New York Times

“Alexandria Ocasio-Cortez has kick-started a much-needed debate about taxes. But the debate, so far, has been misplaced. It’s obvious that the affluent — who’ve seen their earnings boom since 1980 while their taxes fell — can contribute more to the public coffers. And given the revenue needs of the country, it is necessary.

But that’s not the fundamental reason higher top marginal income tax rates are desirable. Their root justification is not about collecting revenue. It is about regulating inequality and the market economy. It is also about safeguarding democracy against oligarchy.

It has always been about that. Look at the history of the United States. From 1930 to 1980, the top marginal income tax rate averaged 78 percent; it exceeded 90 percent from 1951 to 1963. What’s important to realize is that these rates applied to extraordinarily high incomes only, the equivalent of more than several million dollars today. Only the ultrarich were subjected to them. In 1960, for example, the top marginal tax rate of 91 percent started biting above a threshold that was nearly 100 times the average national income per adult, the equivalent of $6.7 million in annual income today. The merely rich — the high-earning professionals, the medium-size company executives, people with incomes in the hundreds of thousands in today’s dollars — were taxed at marginal rates in a range of 25 percent to 50 percent, in line with what’s typical nowadays (for instance, in states like California and New York, including state income taxes).

That few people faced the 90 percent top tax rates was not a bug; it was the feature that caused sky-high incomes to largely disappear. The point of high top marginal income tax rates is to constrain the immoderate, and especially unmerited, accumulation of riches. From the 1930s to the 1980s, the United States came as close as any democratic country ever did to imposing a legal maximum income. The inequality of pretax income shrunk dramatically.”

Opinion | The Economics of Soaking the Rich – By Paul Krugman – The New York Times

What does Alexandria Ocasio-Cortez know about tax policy? A lot.

By Paul Krugman
Opinion Columnist, Jan. 5, 2019, 2666 c

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Representatives Alexandria Ocasio-Cortez of New York and Jahana Hayes of Connecticut on the House floor in Washington on Thursday.CreditCreditCarolyn Kaster/Associated Press

“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.

Some of the revelations are cultural: The hysteria over a video of AOC dancing in college says volumes, not about her, but about the hysterics. But in some ways the more important revelations are intellectual: The right’s denunciation of AOC’s “insane” policy ideas serves as a very good reminder of who is actually insane.

The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.

To be more specific, Diamond, in work with Emmanuel Saez — one of our leading experts on inequality — estimated the optimal top tax rate to be 73 percent. Some put it higher: Christina Romer, top macroeconomist and former head of President Obama’s Council of Economic Advisers, estimates it at more than 80 percent.”

Opinion | Why Was Trump’s Tax Cut a Fizzle? – by Paul Krugman – The New York Times

Last week’s blue wave means that Donald Trump will go into the 2020 election with only one major legislative achievement: a big tax cut for corporations and the wealthy. Still, that tax cut was supposed to accomplish big things. Republicans thought it would give them a big electoral boost, and they predicted dramatic economic gains. What they got instead, however, was a big fizzle.

The political payoff, of course, never arrived. And the economic results have been disappointing. True, we’ve had two quarters of fairly fast economic growth, but such growth spurts are fairly common — there was a substantially bigger spurt in 2014, and hardly anyone noticed. And this growth was driven largely by consumer spending and, surprise, government spending, which wasn’t what the tax cutters promised.

Meanwhile, there’s no sign of the vast investment boom the law’s backers promised. Corporations have used the tax cut’s proceeds largely to buy back their own stock rather than to add jobs and expand capacity.

But why have the tax cut’s impacts been so minimal? Leave aside the glitch-filled changes in individual taxes, which will keep accountants busy for years; the core of the bill was a huge cut in corporate taxes. Why hasn’t this done more to increase investment?”