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pampango

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Hometown: Xenia, OH
Member since: Tue Sep 19, 2006, 04:46 PM
Number of posts: 16,418

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Taxing the rich is good for the economy, IMF says

A new paper by researchers at the International Monetary Fund appears to debunk a tenet of conservative economic ideology — that taxing the rich to give to the poor is bad for the economy. The paper by IMF researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides will be applauded by politicians and economists who regard high levels of income inequality as not only a moral stain on society but also economically unsound.

Labelled as the first study to incorporate recently compiled figures comparing pre- and post-tax data from a large number of countries, the authors say there is convincing evidence that lower net inequality is good economics, boosting growth and leading to longer-lasting periods of expansion.

In the most controversial finding, the study concludes that redistributing wealth, largely through taxation, does not significantly impact growth unless the intervention is extreme. In fact, because redistributing wealth through taxation has the positive impact of reducing inequality, the overall affect on the economy is to boost growth, the researchers conclude.

The authors concede that their conclusions tend to contradict some well-accepted orthodoxy, which holds that taxation is a job killer.

http://www.cbc.ca/news/business/taxing-the-rich-is-good-for-the-economy-imf-says-1.2552141

Seems like a very significant study from a surprising source - which makes it all the sweeter. Can't for Krugman to comment on this.

The authors concede that their conclusions tend to contradict some well-accepted orthodoxy, which holds that taxation is a job killer.

This will be tough pill for the republican party to swallow. OTOH, they are used to rejecting science, facts and the results of studies that contradict the policies they pursue.

"All three are within a few decimal places of the previous highs — which occurred in 1928..."

1928's unmatched record of of income skewed to the top 10%, 1% and .1% came after 8 years of republican regressive taxes, deregulation, weak unions, high tariffs and limited immigration.

Now we have similarly skewed incomes with regressive taxes, deregulation, weak unions, low tariffs and higher immigration. I see which policies are common to both eras of income skewed towards the super-rich.

Great link. Shows that AHI increased more in the 7 years after NAFTA than in the 20 years before it.

As information at the link you provided indicates, inflation adjusted income increased for 7 years after NAFTA (1994-2000) from $48,884 in 1993 (the last year before NAFTA took effect) to $55,987 (Clinton's last year in office) and increase of $7,103 per household or 14.8%. This income did stagnate after 2000, but my guess is the blame for that is more on Bush policies on taxes, regulation and the safety net, then the effect of the Great Recession, than anything else.

By comparison for the 7 years before NAFTA inflation adjusted household income had actually declined from $49,764 in 1986 to $48,884 in 1993.

Indeed in the 20 years before NAFTA that income figure went from $48,557 in 1973 to $48,884 in 1993. So inflation adjusted household income increased by $327 in the 20 years before NAFTA and increased by $7,103 in the 7 years after it.

"People are never told about the progress. Decade after decade, they think it is as it was long ago.

It may come as some comfort to Norwegians that, according to Rosling, the comparatively better performance of American respondents doesn't mean they are better educated: quite the opposite in fact.

The problem for me was not ignorance," he told the audience in his famous TED talk. "It was preconceived ideas."

He said that people in Norway were not kept up to date by the media on changes in global trends, pointing to the deceleration in population growth over the last few decades as the most telling example. According to the survey, there will be two billion children in 2100, a number only seven percent of Americans, six percent of Norwegians and eleven percent of Swedes got correct.

"People are never told about the progress. Decade after decade, they think it is as it was long ago. The world view that emerges corresponds quite well to the world 30-40 years ago. They have a time lag of 30-40 years. Look at vaccination," he continued. "The number of children vaccinated, people think it’s between 20–25 percent who are vaccinated, but it’s 84 percent."

Wonderful article, The Straight Story. Thanks for finding and posting it. It is very interesting to see that people's perceptions of global reality is based on what existed 30-40 years ago. (It feels like this should be the fault of republicans who enjoy living in the past, but I can't figure out exactly why this is the case. )

Switzerland's immigration 'victory' over the EU is a fairytale sold by the far right

Who knew? The Swiss far-right has its own billionaire Koch brother (not related by blood, just by money and ultra-conservative politics)

The winners of the Swiss referendum on EU immigration now tell a story that has become ingrained in Swiss lore: that poor, powerless peasants have cast off their evil foreign lords and masters. Not surprising, then, that after engineering the victory, the billionaire member of parliament Christoph Blocher, of the populist rightwing Swiss Peoples Party (SVP), stated: "Now we take power in our own hands again, the government must represent the will of the Swiss people in Brussels – the sooner the better."

The Swiss business community, our hospitals, schools and colleges, tourism and the building industry which rely on an EU workforce are appalled. Students who benefit from EU exchange programmes and the energy sector which wants to sell its storage capacity to the EU all now fear that their future is called into question.

Of course, Blocher and his followers still believe that the EU will give us a helping hand whenever we need it. But what EU governments want from Switzerland is tax on the undeclared money of their citizens deposited in Swiss banks. Blocher's story of the poor peasant who opposes the foreign king is, in the face of Swiss wealth, ridiculous. The Italians whose workers are no longer welcome in Switzerland now say they want the tax being hidden by Italians in Swiss bank accounts – and if necessary they will name and shame tax dodgers like Germany does.

So their perfectly rational concerns were exploited by the fear campaign waged by the rich Pied Pipers of the right. There are many more such Pied Pipers going around Europe with easy, popular solutions, including the scapegoating of immigrants, in an attempt to win the votes of those with justifiable fears. Switzerland has an unemployment rate of 3.5%; there is a lot to lose.

http://www.theguardian.com/commentisfree/2014/feb/11/europe-far-right-switzerland-immigration-victory-eu

These "far-right populist" movements always seem to have a billionaire or two providing the finding for their "populism".

Something tells me that Mr. Blocher's "populist" party will not be next turning its attention to changing banking secrecy laws, raising taxes on the rich or any other liberal policy. Being anti-immigrant is "red meat" for the European right. I suspect their "populism" will stop there.

Oh it's far right by any objective standard.

It's a party of "national conservatism" and skeptical about any expansion of governmental services.
It rejects increases in government spending on social welfare and education.
It supports supply-side economics. Thus it is a proponent of lower taxes and is against deficit spending.
It opposes governmental measures for environmental protection.
It rejects expansion of the welfare state, and stands for a conservative society.
It commits itself to make asylum laws stricter and to reduce immigration.
It wants the racism penalty and anti-racism commission to be abolished in the interest of freedom of speech.

http://en.wikipedia.org/wiki/Swiss_People%27s_Party

I am not sure what you define as 'far right'. Of course this referendum was just about immigration, not about their whole agenda.

There are plenty of countries with far-right parties represented in their parliaments. That does not mean the parties are not far-right, just because they get people elected to office. "Far-right" is defined by the policies they pursue, not by their success in elections. (There was a famous German far-right party that won 33% of the seats in the German election of 1933. It was a far-right party, anyway.)

Actually workers in China, India, Brazil, etc. have been the big winners - along with our 1%.



The top 1% has seen its real income rise by more than 60% over those two decades. The largest increases however were registered around the median: 80% real increase at the median itself and some 70% around it. It is there, between the 50th and 60th percentile of the global income distribution that we find some 200 million Chinese, 90 million Indians, and about 30 million people each from Indonesia, Brazil and Egypt. These two groups—the global top 1% and the workers of the emerging market economies— are indeed the main winners of globalization...

But the biggest loser (other than the very poorest 5%), or at least the “non-winner,” of globalization were those between the 75th and 90th percentile of the global income distribution whose real income gains were essentially nil. These people, who may be called a global upper-middle class, include many from former Communist countries and Latin America, as well as those citizens of rich countries whose incomes stagnated.

More than fifty percent of one’s income depends on the average income of the country where a person lives or was born (the two things being, for 97% of world population, the same). This gives the importance of the location element today. There are of course other factors that matter for one’s income, from gender and parental education which are, from an individual point of view externally given circumstances, to factors like own education, effort and luck that are not. They all influence our income level. But the remarkable thing is that a very large chunk of our income will be determined by only one variable, citizenship, that we, generally, acquire at birth. It is almost the same as saying, that if I know nothing about any given individual in the world, I can, with a reasonably good confidence, predict her income just from the knowledge of her citizenship... Around 1870, class explained more than 2/3 of global inequality. And now? The proportions have exactly flipped: more than 2/3 of total inequality is due to location.



http://gulzar05.blogspot.com/2013/11/measuring-global-inequality.html

As the author points out the biggest losers were the poorest 5% of the world's population and the middle class in the developed world. The big winners were workers in emerging countries and the global 1%.

While it is encouraging to see much progress in the incomes of previously very poor people (from the poorest 10% up to the poorest 70% or so), the growth of incomes of the 1% needs to be addressed and redistributed to the poorest 5% and the middle class in the developed world.

Poll: conservative and moderate republicans oppose fast track by a ratio of 85 percent or higher.

Trans-Pacific Partnership (TPP) Poll: Only The Strongest Obama Supporters Want Him To Have Fast Track Authority

Americans are not keen on Congress giving U.S. President Barack Obama what he wants: the authority to negotiate a massive free-trade pact among a comity of Pacific Rim countries and then deliver the results to Capitol Hill for a swift up-or-down vote, known as fast-track authority. Overall, the U.S. public is cooling to the idea of free-trade agreements, believing, unlike they have in the past, that multinational agreements to bring down trade barriers is costing U.S. jobs while favoring large multinational corporations over the interests of small businesses.

U.S. lawmakers are most certainly tracking public sentiment to the subject of free trade and how their support or opposition will play out in their districts as voters head to the polls. And if this national poll is any indication only the staunchest supporters of the president in the Democratic Party agree with the idea of granting the White House fast-track TPP authority.

On the question of fast-track authority, 62 percent of respondent opposed the idea, with 43 percent “strongly” opposing it. Broken down by political affiliation, only Democrats that identify as “liberal” strongly favor the idea. Predictably, a strong Republican majority oppose giving the president such authority, with both conservative and moderates oppose it by a ratio of 85 percent or higher. And perhaps most important: 66 percent of respondents who identified as independent, meaning they have no party affiliation and are a key voting constituency, oppose the idea.

Among the biggest concerns by respondents for opposing fast-track authority was that they felt it gives the president too much power. But interestingly enough, the second strongest concern among respondents was that workers in TPP countries are paid so little that it’s unfair to U.S. workers to expect them to compete with a flood of imports made under less costly conditions to employers.

http://www.ibtimes.com/trans-pacific-partnership-tpp-poll-only-strongest-obama-supporters-want-him-have-fast-track-1552039

Republican opposition to 'fast track' probably has as much to do with ODS as with anything else though opponents also cited the risk from competition from low-wage workers.

Since most republican politicians support "fast track", this seems to have the potential for another round in their "civil war".

”The only thing that is completely clear – people came out against Yanukovich."

Fantastic pictures and great insight into what is going on.

I would like to dispel the most common myths about Maidan.

1."They destroyed the whole city"

Not true.
All of the action you see in the pictures are happening on a small square near the entrance to a Dinamo stadium. This is a government sector, there is no intereference in peaceful life outside of this area. ... Even the statue of Lobanovsky, located in the epicenter of fighting has been covered with cloth to prevent damage. Overall, the protesters are very careful regarding property. They've take apart fences and benches, but no windows are broken, noone is vandalizing, and all looters are caught and beaten. So the picture is pretty apocalyptic, but things are not so bad.

2. "This is not a revolution, nothing horrible is happening"

Also not true. This is a real revolution.
Decide for yourselves: it's been two months since the center of Kiev has been in the hands of the opposition. Several government buildings are seized. The work of many government offices is paralyzed. The opposition has created barricades, which the authorities have not be able to take. Despite the freezing temps, tens of thousands of people are on the streets for the last two months. The system of defense and supply chain are established. There is perfect order at the protestor HQ, people are fed, dressed, people are pooling money to gather supplies. The most important thing: the people in power are unable to restore order. The police has failed several times at try to storm the barricades. I'll make a separate post about this, but trust me, the only way to dismantle this is with heavy artillery, or drop in commandos. Every day the opposition is securing more territories. What is this if not a revolution?

3. "The entire Kiev is paralyzed, there is no peaceful life for the regular people."

Kiev is living its own life.
All stores and cafes are working, people are going to work, study in universities, get married, divorce and even die their own death. Most of the Kiev populace are not inconvenienced. ... Also, those living in the center have troubles with logistics. But the entire Kiev is not paralyzed.

Now, when you know all the truth, let’s see how this day was.

I agree. But, on some level, I think that high standards were Obama's original goal.

(One administration strategy) will be the pursuit of trade agreements that notably do not include China. The most important of these is the Trans-Pacific Partnership (TPP), a trade agreement among a growing list of nations bordering the Pacific. It is the Obama administration’s avowed aim to construct a TPP with standards so high — especially rules regarding behavior by state-owned enterprises — that China could never join without transforming its economic system.

http://www.pewglobal.org/2012/12/10/u-s-china-economic-relations-in-the-wake-of-the-u-s-election/

Obama seems to know that we cannot compete with China by lowering standards. China will always win that race. China is vulnerable to an agreement that raises standards since it cannot join unless it does the same. This is the what European countries get out of the EU. Membership brings no tariff barriers but high labor and environmental standards.

...the negotiation is subject to the U.S. domestic politics. At the very beginning of the negotiation, the United States reminded other countries that the U.S. Congress would not accept a TPP without strong labor and environmental measures. Obviously, the United States aims to lower the comparative advantages of developing countries so as to create more job opportunities for itself.

http://english.peopledaily.com.cn/90777/8113289.html

The report indicates that the United States has been pushing for tough environmental provisions, particularly legally binding language that would provide for sanctions against participating countries for environmental violations. The United States is also insisting that the nations follow existing global environmental treaties.

But many of those proposals are opposed by most or all of the other Pacific Rim nations working on the deal, including Australia, New Zealand, Canada, Mexico, Chile, Japan, Singapore, Malaysia, Brunei, Vietnam and Peru. Developing Asian countries, in particular, have long resisted outside efforts to enforce strong environmental controls, arguing that they could hurt their growing economies.

The report appears to indicate that the United States is losing many of those fights ...

http://www.nytimes.com/2014/01/15/us/politics/administration-is-seen-as-retreating-on-environment-in-talks-on-pacific-trade.html
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