PODCAST: Hexapodia XIV: The Capital Gains Tax

Noah Smith & Brad DeLong's 30:00 < [Length of Weekly Podcast] < 60:00

Key Insights:

  1. Economic arguments against higher taxes that may have been somewhat plausible back in the days of 70% or so maximum individual and 40% or so maximum capital gains tax rates simply do not apply now.

  2. Right-wing parties that don't think they can credibly make the argument that cosseting their core constituencies is necessary for rapid economic growth search for some non-economic cleavage in which the rich and the right-thinking poor, or the right-colored poor, can be on one side and the people who seek a fairer and more equal distribution of income and higher taxes on the rich can be put on the other—let's all yell about critical race theory, and maybe they won't pay attention to the fact that we just, you know, take everybody's money.

  3. Capital to fund investment is really not a big constraint right now—incentivizing savings in financial assets really is just pushing on a string.

  4. Companies with investments that have high societal value in expansion need to be properly incentivized—either by the smell of more profits next year from serving a larger market with lower costs of production through larger scale, or through the government paying and so getting prices righter than the free market gets them.

  5. “Doge coin” is pronounced with a soft “g” sound.

  6. No, Doge coin is not named after the title of the head of state of the Venetian Republic

  7. Doge coin’s name comes from the Homestar Runner line: “I want a doge”…

  8. Hexapodia!

 


 

References:

Len Burman (2021): Biden Would Close Giant Capital Gains Loopholes—At Least For The Rich <https://www.taxpolicycenter.org/taxvox/biden-would-close-giant-capital-gains-loopholes-least-rich>

Peter Diamond & James Mirrlees (1971): Optimal Taxation and Public Production I: Production Efficiency <https://www.jstor.org/stable/1910538>

Peter Diamond & James Mirrlees (1971): Optimal Taxation and Public Production II: Tax Rules <https://assets.aeaweb.org/asset-server/journals/aer/top20/61.3.261-278.pdf>

Ken Judd (1999): Optimal Taxation and Spending in General Competitive Growth Models <http://darp.lse.ac.uk/PapersDB/Judd_(JPubE_99).pdf>

Paul Krugman (2021): Why Doesn’t Cutting Taxes on the Wealthy Work?<https://www.nytimes.com/2021/04/30/opinion/tax-cuts-rich.html>

Jacob Lundberg & Johannes Nathell (2021): Tax Burden on Capital Income: International Comparison <https://taxfoundation.org/tax-burden-on-capital-income/>

Robert McClelland (2021): Avoiding Biden’s Proposed Capital Gains Tax Hikes Won’t Be So Easy. Or Will It? <https://www.taxpolicycenter.org/taxvox/avoiding-bidens-proposed-capital-gains-tax-hikes-wont-be-so-easy-or-will-it>

Alicia Munnell (2021): Biden’s Plan to Fully Tax Capital Gains Is Good Policy<https://www.marketwatch.com/story/bidens-plan-to-fully-tax-capital-gains-is-good-policy-11620658190>

Garrett Watson & Erica York (2021): Capital Gain Rates Under Biden Tax Plan<https://taxfoundation.org/biden-capital-gains-tax-rates/>

Thomas Piketty & Emmanuel Saez (2012): A Theory of Optimal Capital Taxation <http://gesd.free.fr/w17989.pdf>

Ludwig Straub & Ivan Werning (2020): Positive Long-Run Capital Taxation: Chamley-Judd Revisited <https://www.aeaweb.org/articles?id=10.1257/aer.20150210>

Tax Foundation (2017): Preliminary Details and Analysis of the Tax Cuts and Jobs Act <https://taxfoundation.org/final-tax-cuts-and-jobs-act-details-analysis/>

&, of course:

Vernor VingeA Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>

 

 

<https://braddelong.substack.com/p/podcast-hexapodia-xiv-the-capital>

 

 


INTERVIEW: Inflation Concerns in the US Following Secretary Treasury Janet

An 11 minute IN FOCUS interview for tbs eFM in Korea...

Brad DeLongINTERVIEW: Inflation Concerns in the US Following Secretary Treasury Janet: ‘Apple Podcasts: tbs eFM This Morning: 0514 IN FOCUS… <https://podcasts.apple.com/kr/podcast/0514-in-focus-2-inflation-concerns-in-us-following/id1038822609?i=1000521665790&l=en>

 

<https://braddelong.substack.com/p/interview-inflation-concerns-in-the-0b5>


Cory Doctorow on How Weblogging Made His Brain What It Is Today; & BRIEFLY NOTED: For 2021-05-16 Su

Things that went whizzing by that I want to remember...

An all-in commitment to weblogging has been extraordinarily successful for Cory Doctorow. But for most of us the connections between the current flow, the past stock, and the larger projects that he has managed to maintain have eluded us. We can either manage the flow, curate the stock, or ship large projects—only one at a time:

Cory DoctorowThe Memex Method. When Your Commonplace Book Is a Public Database: ‘The very act of recording your actions and impressions is itself powerfully mnemonic…. The genius of the blog was… in the publishing. The act of making your log-file public requires a rigor that keeping personal notes does not…. Repeated acts of public description adds each idea to a supersaturated, subconscious solution of fragmentary elements that have the potential to become something bigger. Every now and again, a few of these fragments will stick to each other and nucleate…. When one of those nucleation events occurs, the full-text search and tag-based retrieval tools built into Wordpress allow me to bring up everything I’ve ever written on the subject…. The availability of a deep, digital, searchable, published and public archive of my thoughts turns habits that would otherwise be time-wasters—or even harmful—into something valuable…. Systematically reviewing your older work to find the patterns in where you got it wrong (and right!) is hugely beneficial—it’s a useful process of introspection that makes it easier to spot and avoid your own pitfalls…. Two decades in, I can safely say that this community of peers, mentors, sounding boards, protégés, friends, combatants and interlocutors is more useful to me as a writer and a person than the even the prodigious instrumental benefits that blogging brings to my composition process… 

LINK: <https://doctorow.medium.com/the-memex-method-238c71f2fb46>

 

Continue reading "Cory Doctorow on How Weblogging Made His Brain What It Is Today; & BRIEFLY NOTED: For 2021-05-16 Su" »


BRIEFLY NOTED: For 2021-05-13 Th

Things that went whizzing by that I want to remember...

 

First:

The world would have been much better advised fifteen months ago to, rather than listening to the infectious-disease community, WHO, & CDC, to have simply observed: This thing evolved it batcaves. Avoid batcaves. Make sure that the respiratory environment in which you breathe is as close to being the exact opposite of a batcave as you can—ventilation, outdoors, distanced, masks:

Zeynep TufekciThe Few Sentences That Explain Much of What Went Wrong With Our Pandemic Response: ‘How could it be so wrong, even after more than a year?… Some of the founders of public health and the field of infectious control of diseases around the world made key errors and conflations around the turn of the 20th century. These errors essentially froze into tradition and dogma that went unchanged and uncorrected for more than a century, until a pandemic forced our hand…. Infection, which is easier at close range, was seen to be due to particles sprayed out of one’s mouth, which fell quickly to the ground but could land on people. The possibility that, even at close range, people were inhaling floating little particles (aerosols!) that could also travel farther, was discounted…. Charles Chapin… was also concerned that belief in airborne transmission, which he associated with miasma theories, would make people feel helpless and drop their guard against contact transmission. This was a mistake that would haunt infection control for the next century and more…. Of course, the data did not fit this theory. Infections were happening mostly indoors, not outdoors, whereas droplets would be indifferent to existing indoors or outdoors since gravity is the same in both. Infections were occurring at longer distances…. Superspreading was driving the pandemic…. Droplets aren’t very conducive to such superspreading. Scientists who understand all this tried to raise the alarms…. They were rebuffed for almost a year. Last fall, under fire, the WHO assigned reviews of this topic to the very people who had loudly proclaimed their opinions for many months that the virus was being spread via respiratory droplets…

LINK: <https://www.theinsight.org/p/the-few-sentences-that-explain-much>

Continue reading "BRIEFLY NOTED: For 2021-05-13 Th" »


HOISTED FROM THE ARCHIVES: Review of Richard Evans: "Lying About Hitler"

I always wish I had done something more with this...

Richard Evans (2000), Lying About Hitler: History, the Holocaust, and the David Irving Trial (New York: Basic Books: 0465021522). 

Richard Evans (1997), In Defense of History (New York: Norton: 0393319598).


 

The Irving Case

For about a decade Richard Evans's (1987) book Death in Hamburg: Society and Politics in the Cholera Years 1830-1910 had been on my "read someday" list. But at the beginning of 2000 I ran across his name again. He was to be an expert witness for author Deborah Lipstadt in her defense against David Irving's charge that she had libeled him by calling him a "Holocaust denier."

Irving had sued Lipstadt because her 1994 book Denying the Holocaust, had called him a "discredited" historian with "neofascist" connections, an ardent admirer of Hitler who "on some level... seems to conceive himself as carrying on Hitler's legacy," who skews documents and misquotes evidence to reach historically untenable conclusions in the interest of exonerating Hitler (see Evans (2000), p. 6). Irving demanded that Penguin Books, Lipstadt's publisher, withdraw her book from circulation. Penguin refused. And in the summer of 1996 David Irving sued.

Deborah Lipstadt and Penguin Books then had two choices: (a) withdraw the book and apologize to Nazi sympathizer David Irving, or (b) defend themselves. And, as Richard Evans explains, under British law a libel defense amounts to a no-holds-barred, fangs-bared, go-for-the-jugular attack on the reputation of the plaintiff. As he writes (Evans (2000), p. 193): "[A] successful libel defense... has to concentrate... on massively defaming the person and character of the plaintiff, the only restriction being that the defamation undertaken in court has to be along the same lines as the defamation that gave rise to the case in the first place, and that it has, of course, to be true." Thus the structure of the case: if she were to escape an adverse judgment, Deborah Lipstadt's attorneys had to demonstrate that David Irving was a Holocaust denier who skews documents and misquotes evidence. In short, they would have to demonstrate that he was "discredited": not a credible historian at all.

It was here that Evans was brought in as an expert to provide an assessment of Irving's work as a historian. He agreed to serve as an expert witness at least in part because he was deeply concerned with what makes a historian: Evans had recently (1997) published a book, In Defense of History, that had wrestled with the question of what historians did, and how they did it.

Continue reading "HOISTED FROM THE ARCHIVES: Review of Richard Evans: "Lying About Hitler"" »


BRIEFLY NOTED: For 2021-05-12 We; + A Guess at the State of the Plague in India, & the Right Wing Long Con

 

First:

A Snippet from a Dialogue: The Current Plague in India:

Axiothea: How much worse are things in India than the statistics the Indian government is reporting say?

Parmenides: We do think that here in the United States we have had 900,000 rather than 600,000 deaths—out of a total caseload of perhaps 60 million, perhaps 120 million. How bad are things in India right now, really? And how bad are they going to get?

Aesclepius: We do not know. We guess that true plague deaths are between three and eight times officially recorded deaths. And we guess that India is only halfway through this current plague wave.

Axiothea: If so, note that India currently is at 200 reported deaths per million—say the true number is 1000, 0.1% of the population, and it is going to double before this wave is through. With a population of 1.4 billion, that would be 3 million dead by the time this wave ebbs…


Continue reading "" »


BRIEFLY NOTED: For 2021-05-11 Tu

Things that went whizzing by that I want to remember...

First:

Here we see a striking difference between Paul Krugman and Larry Summers. Krugman sees models as intuition pumps—and believes strongly, very strongly, that if you cannot make a simple model of it, it is probably wrong. Summers believes that our models are, at best, filing systems (and at worst tools for misleading the unwary)—and that the right way to think about the economy is as, in some way, a two-state system, with expansion being one state and recession the other, so that you cannot halt an expansion without tipping the economy fully into recession:

Paul KrugmanWonking Out: Braking Bad?: ‘A more explicit critique comes from Larry Summers, who has warned that the stimulus may lead to stagflation. He appears to believe that the Fed can’t use monetary tightening to offset overheating generated by fiscal expansion without causing a nasty recession. But I have to admit to being a bit puzzled about why…. Summers[’s]… underlying macroeconomic model is pretty much the same as mine…. And that model seems to say that the Fed can indeed tap on the brakes if needed. Indeed, the Fed has done that in the past: in the 80s and again in the 90s it acted to rein in booms without causing recessions…. Claims that we can’t rely on the Fed to rein in inflation if the stimulus turns out to be too big have to rest on some departure from the workhorse model most sensible people use to think about macroeconomic policy…. Even if you’re uncomfortable with President Biden’s fiscal policies, you should be very cautious about making arguments against them that rely on novel propositions about why inflation can’t be contained. Conventional analysis says what Janet Yellen said: If the stimulus proves bigger than needed, the Fed can keep things under control. If you’re asserting otherwise, think hard about why you’re saying that…

LINK: <https://messaging-custom-newsletters.nytimes.com/template/oakv2>

My take? Of the last six tightening cycles, three have been followed by demand-shock recessions within two years of the tightening cycle’s end. I interpret this as: you gotta halt the tightening before you overdo it, and that is not the easiest thing in the world. But there is no law-like regularity there.


Continue reading "BRIEFLY NOTED: For 2021-05-11 Tu" »


BRIEFLY NOTED: For 2021-05-11 Tu

Things that went whizzing by that I want to remember...

First:

Here we see a striking difference between Paul Krugman and Larry Summers. Krugman sees models as intuition pumps—and believes strongly, very strongly, that if you cannot make a simple model of it, it is probably wrong. Summers believes that our models are, at best, filing systems (and at worst tools for misleading the unwary)—and that the right way to think about the economy is as, in some way, a two-state system, with expansion being one state and recession the other, so that you cannot halt an expansion without tipping the economy fully into recession:

Paul KrugmanWonking Out: Braking Bad?: ‘A more explicit critique comes from Larry Summers, who has warned that the stimulus may lead to stagflation. He appears to believe that the Fed can’t use monetary tightening to offset overheating generated by fiscal expansion without causing a nasty recession. But I have to admit to being a bit puzzled about why…. Summers[’s]… underlying macroeconomic model is pretty much the same as mine…. And that model seems to say that the Fed can indeed tap on the brakes if needed. Indeed, the Fed has done that in the past: in the 80s and again in the 90s it acted to rein in booms without causing recessions…. Claims that we can’t rely on the Fed to rein in inflation if the stimulus turns out to be too big have to rest on some departure from the workhorse model most sensible people use to think about macroeconomic policy…. Even if you’re uncomfortable with President Biden’s fiscal policies, you should be very cautious about making arguments against them that rely on novel propositions about why inflation can’t be contained. Conventional analysis says what Janet Yellen said: If the stimulus proves bigger than needed, the Fed can keep things under control. If you’re asserting otherwise, think hard about why you’re saying that…

LINK: <https://messaging-custom-newsletters.nytimes.com/template/oakv2>

My take? Of the last six tightening cycles, three have been followed by demand-shock recessions within two years of the tightening cycle’s end. I interpret this as: you gotta halt the tightening before you overdo it, and that is not the easiest thing in the world. But there is no law-like regularity there.


Continue reading "BRIEFLY NOTED: For 2021-05-11 Tu" »


BRIEFLY NOTED: For 2021-05-10 Mo, & Anti-Anti Tory Little-Englandism

First:

A Snippet from a Dialogue: Anti-Anti Tory Little Englandism:

Kephalos: I am pretty sure that—within the population of Great Britain—the Tories are a marked minority.  And—yet—they could easily be governing with a pretty comfortable margin for the next 10 years.  It is kind of unnerving how a minority faction has—more or less—run the joint ever since “the strange death of Liberal England”.   Even when Blair and Gordon were PMs—they still had to triangulate. And—perhaps the strangest thing of all – the Conservatives have run the joint, but everyone else gets blamed for (i) haphazard retreat from Empire and (ii) relative economic decline. Its almost as if the Conservative are “alcoholic Daddy” who everyone is supposed to clean up after…

Thrasymakhos: “Almost”? The Tories are a minority in Great Britain. There is, however, a durable majority that would rather see the Tories rule than Labour rule. They would like somebody else—not, of course, them; heavens forbid!—to rid them of feather-bedding union members, officious bureaucrats, and uppity women; and ensure that the Pakies are kept in their place.

This majority can be overcome when Labour’s leadership persuades the electorate that it is really a centrist Liberal Party in disguise. The problem is that the base and the cadres very strongly disagree with this “New Labour” position. And Blair and Brown were incapable of constructing any alternative organizational base.

Otherwise, no matter how badly the Tories cock it up, they are not enablers of feather-bedding union members, officious bureaucrats, uppity women, and Pakies…

Ask not, American Democrats, for whom the bell tolls…

Continue reading "BRIEFLY NOTED: For 2021-05-10 Mo, & Anti-Anti Tory Little-Englandism" »


BRIEFLY NOTED: For 2021-05-09 Su

Things that went whizzing by that I want to remember...

Continue reading "BRIEFLY NOTED: For 2021-05-09 Su" »