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This article from Mankiw in the NYT, regarding middle class tax rates, deserves some attention as well.

Mankiw was an author of a "White Paper" on Romney's plan -

Difficult to see how he could sign off on that paper and then turn around and write: "My fear is that both sides are engaged in an excess of wishful thinking, with a dash of mendacity. ... If Republicans had their way, they would focus the entire solution on the spending side."

If there is wishful thinking and mendacity in the Republican position then Mankiw is at the least an enabler of those vices. It is though he has forgotten that he was a key Republican policy adviser. If he thought the Republicans were engaged in "wishful thinking" he had ample opportunity to say so before November 6. At the least he should have distanced himself from the campaign.

Indeed. Having promoted and encouraged one side's wishful thinking he now condemns it all. I wonder what he would be saying if Romney had won.


Any examples rather than empty accusations?

Romney said he would eliminate tax breaks and the Democrats' only criticism was that he wouldn't hang himself with specifics.

So, bring your own specifics or pipe down.

"the Democrats’ only criticism"

No. The criticism was that Romney was lying when he said he had a plan and that the plan added up. Asking him for the details was a just a way of showing he was lying.

I've watched a few witnesses and I am convinced that Romney was lying (and knew he was lying) but take him at his word that he had a plan - no one should run for President with a plan where revealing the specifics of the "plan" would "hang" him.

Here is the crux of Mankiw:

"Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans. This could involve higher tax rates or an elimination of popular deductions. Or it could mean an entirely new tax, such as a value-added tax or a carbon tax. "

What actually do you disagree with? I'm talking about actual realities, not rehashing your electoral campaign shenanigans.

"What actually do you disagree with?"

I disagree with a Harvard professor using his academic credentials to give credibility to a political platform where it appears that his real feelings about the platform are that it is "wishful thinking, with a dash of mendacity".

I take no exception to the proposition he is now putting forward that either spending has to go down or taxes have to go up and I personally believe that there should be some of both.

Clearly, anyone who is unable to make his ideal policies come to political fruition - despite being only an unelected advisor himself - is condemnable as a hypocrite and worse.

A man who endorses a set of policies when he sees potential reward to himself for doing so and then subsequently condemns those policies as "wishful thinking and mendacity" when the hope of reward disappears is indeed "condemnable as a hypocrite and worse."

Well said.

Yes yes, excellent ad hominen evisceration of Mankiw and his principles.

Any non ad hominen thoughts on the article? I think it's spot-on, obviously true even.

Run for president for the tax breaks?


Flee to London or Belgium: it's what some Frenchies are doing. Ah, but for US citizens Big Gouger chases you anywhere in the world, doesn't he?

Only if you tell him what you're doing.

Hah, if only!

Or if you want a passport. Or have a bank account which involves any money transfers with SWIFT (meaning - if it isn't cash, and it does go through a bank).

And as Romney seemingly out, not filing TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) can be quite expensive - the Swiss aren't as secret as they used to be.

Let's just say that American citizens have a very, very difficult time not being subject to their government, in a way essentially unknown by citizens of any other Western country, regardless of where that American citizen lives. Whether the American government cares is another question - Romney's hiding of millions certainly was an incentive for his apparent self-reporting of his hidden accounts during an amnesty period - the penalties are really quite, quite stiff - large mandatory fines, of course, and if memory serves, 50% of the value of the ccount is forfeit.

As I recall, the theory that Romney had illegal offshore accounts and used the amnesty period was based on nothing more than Romney (1) having offshore accounts and (2) not publicly releasing his tax records for the year when amnesty was available. That's pretty thin evidence.

My memory is that it was because the record keeping for the foreign tax exemption is different than standard returns, and that the penalty first appeared in that context - but let me google a bit.

Here is some information (if not what I remember from the article I read based on a lawyer/tax prof appraisal of how Romney used the foreign tax exemption adroitly, and how that reporting revealed much more insight than the tax returns Romney actually released) -

'On his 2010 tax return, Romney disclosed that his wife Ann's trust held $3 million in a Swiss bank account at UBS, which had just been busted by the IRS for abetting criminal tax evasion by U.S. citizens. As part of a $780 million settlement, UBS was forced to turn over the names of thousands of its long-secret clients, who were then offered a partial amnesty: disclose their hidden assets, pay penalties and avoid prosecution. Romney – who had omitted the Swiss account on previous financial disclosures – suddenly came clean. Did he reveal his secret account to avoid prosecution for tax evasion? "He's not quite denied that," says Daniel Shaviro, a professor of tax law at NYU. The record of paying an IRS penalty on the Swiss account could explain why Romney has been so determined to keep his 2009 tax return under wraps.'

Well, a touch more circumstantial, admittedly.

But as a very cautious filer of that same form, very well aware of its penalties (not to mention amnesty periods - the current one seems to be ongoing, though I was unaware of special arrrangements made for high capital American tax evaders involving Swiss banks breaking American tax law), there is no way that if Ann Romney did not correctly file the information concerning 'her' account (I would be surprised if they filed individually) that they would have escaped paying a penalty - and the fact that a previously undisclosed account became disclosed is more than simply circumstantial, it is a priori evidence of an infraction, which entails mandatory penalties.

And two notes -

1. The amnesty simply reduces the amount of penalty, in part because the money involved can now be properly taxed in the future.

2. The filing of the bank form has nothing to do with paying taxes, directly. Even if a foreign bank account earns no interest, any American citizen who does not report an account which has at least $10,001 at any point in the calendar year can be subject to penalty, though truly small time infractions are no longer treated as harshly as I remember from the 90s (no exceptions for 'reasonable' is my memory, and it has been a long while since the penalties have concerned me in the least) -

'A person who is required to file an FBAR and fails to properly file may
be subject to a civil penalty not to exceed $10,000 per violation. If there
is reasonable cause for the failure and the balance in the account is
properly reported, no penalty will be imposed. A person who willfully
fails to report an account or account identifying information may be
subject to a civil monetary penalty equal to the greater of $100,000 or
50 percent of the balance in the account at the time of the violation.'

And different amnesty programs reduced that penalty to a number between 5% and 20% - leaving aside any special arrangment for most favored American tax evaders of a Swiss bank, it is reasonable to assume that the Romney paid a penalty between $125,000 to $600,000 (or less, if that famed private banking service extended to dealing with the Treasury) - not to mention the back taxes, of course.

Some people with a bit of experience in dealing with American taxes and holding foreign accounts are very, very well aware of why Romney was never going to release his earlier tax forms. He had been caught evading paying the taxes he owed, in a way that was quite blatant (not to mention stupid - the Swiss are being squeezed too hard to care about keeping some tax evading foreigner's bank information secret, whether in the EU or the U.S.).

Re: Gun Insurance

Go further.

Require gun manufacturers to maintain a database of gun owners to match up against state and federal gun registration records.

There are many items sold in interstate commerce where the original manufacturer has to maintain a record of the chain of ownership of the item--this can include chemicals, products posing hazards, etc. Records are often maintained by the initial manufacturer and the government.

Failure to maintain adequate records so that there could be match against federal records would result in liability for any damages caused by illegal gun acquisition.

We do more to record title ownership of houses, cars, other hazardous materials than we do guns and weapons.

An added benefit would be that part of the cost of registration would be shifted to the manufacturer, rather than government, and that, ironically, gun manufacturers would be operating with the ATF.

Also register people with AIDS and other communicable diseases, and publish that information online.

Actually, my wife, who worked as a public librarian, would have liked to have known if some of the people who acted crazy in the library had gun permits or owned guns. She would have told the police that x person was mentally unstable, based on behaviour, if she knew that person had a gun.

Unfortunately, one of her library patrons did have a gun, was mentally unstable, and shot and killed a relative and her attorney in court.

So, if you know someone is mentally ill, is it in your interest to know if that person owns a gun?

Someone who was killed had their liberty taken from them and could have protected themselves from a "communicable" disease of lead poisoning..

-1 Trolling. Come back when you can have a mature and reasonable conversation.

Oh, let's have an adult conversation...words usually chosen by those immature folks who pick up Fox News and Boehner words.

The truth is that there are mentally ill people who have access to assault weapons.

As you said: "Come back when you can have a mature and reasonable conversation."

Mine was a reply to 8. I generally agree with you on this one.

"Among the many misdeeds of British rule in India, history will look upon the Act depriving a whole nation of arms as the blackest." - Mohandas Gandhi, an Autobiography, page 446.

Register and quarantine all AIDS-positives prowling the Earth to kill. In 2010, 2,500,000 people were newly infected with AIDS.

Also, register all Muslims: since 9/11/2001, they committed more than 10,000 massacres.

Also, register and insure all gays: each year hundreds of of youths are raped by them.

I could go on.

It's just that you people are narrowly selectve in your mass stigmatization of me.

That would probably help - unless you report your gun stolen, you'd have no excuse (or at least no verifiable excuse) for why it was used in a crime.

The analogy to cars and homes, though, if faulty in that those chain-of-ownership rules are in place to protect the owner from claims of squatters and thieves. For similar protection, people will voluntarily get their jewelry or other valuables etched and registered with the local police, or implant microchips in their dogs. Gun owners, on the other hand, are typicially disinclined to have their guns registered.

"and shot and killed a relative and her attorney in court."


You aren't responsible for someone else's actions if they steal your car. You folks want to change the rules of the game just for guns for no apparently logical reason.

Bill, where do you live where the court doesnt' have checkpoints and an infinity ratio of armed security relative to schools?

It certainly couldn't have been one of the opulent Federal court bunkers.

"Gun owners, on the other hand, are typicially disinclined to have their guns registered."

Late entry in the 'understatement of the year' category.

I am not going to tell you where I live. After that incident the court, located in a larger building entrances and exits, and on several floors, had to put in very expensive equipment at all entrances to the building, and had to close some entrances.

I suppose you're going to argue that they should have posted NRA volunteers at the entrances, or that everyone should have guns.

Not the least of all being that governments and journalists are completely unqualified to handle private information.

"I know, criminals at least are unaware exactly where the guns are, so let's publish their locations."

Economically ignorant. Possibly criminal. Certainly evil. Some people certainly can't be trusted with the 1st Amendment, but I'm a forgiving type guy.

Andrew' I think you're being a little too quick with Bill here. Suppose you were at the playground with your child and out of the corner of your eye you noticed a youngster pulling a paper bag from beneath a looked like there might be something metal, maybe a knife or even a gun in the bag. I firmly believe that you would double time over there and make sure that child was in no danger. No one would stand there and say well i-Phone-ear dad over there is responsible for his son; I am not getting involved.

Dangerous objects (guns included) should not end up in the hands of people who have a limited concept of reality be they children, people under the influence of drugs or alcohol (recall the Russian roulette link earlier in the year), or those suffering from a mental health episode. Yes, accidents happen and some fully aware, intentional adults engage in harmful behavior. I would agree with Bill that we (all) need to be concerned about individuals who are not capable of acting in their best interest. And I would agree with you that this is extremely difficult and we have to avoid heavy-handed measures.

"Gun owners, on the other hand, are typicially disinclined to have their guns registered."

Yeah because of shananagans like this:

The Japanese authorities are in crisis response mode and will look more and more like some third world kleptocracy in an attempt to keep things going for a little while longer. Abe sounds about right; might as well have a bit of fun.

Isn't there a game theory scenario where the failure of one large player would be so damaging to everyone else that they are forced to go along with whatever cockamamie scheme they come up with?

Have you ever been to Japan? The idea of the country being compared to a Third World kleptocracy is ludicrous. Its problems are entirely characteristic of other rich nations on the technological frontier.

Have you ever been in a country that has faced a fiscal crisis? All the wonderful stuff that has been built goes down hill extraordinarily fast when there isn't money to pay to maintain it. What was described in the article were a series of reactions to a crisis that has been building a long long time. There are two reactions that occur in these situations. Either someone stands up and calls it like it is, and is given the backing to do the necessary reforms. We saw that in Sweden and Canada during the 90's. Or there are a series of people that come and go, no one with any influence or even interest in sorting it out. How many finance ministers has Japan had over the last couple of year?

This guy seems intent on recreating the glory days of old, when Japan had an unparalleled industrial strength, a nation filled with hard working young men that conquered any market they took interest in. Now they are on the verge of reversing their balance of trade, and are old.

I think Japan is an ongoing object lesson on how long it takes for a rich nation to become poor.

Somehow, we have to make it worth Shinzo's while to follow through with the inflation targeting. If he implements an inflation target, he gets to build a new shrine just for the war criminals.

Feel kinda dumb, I can't figure out what kind of experiment was going on in #1 with its go and no go items.

On any economic study, I'd like to know who funds it, directly or indirectly. Seems to me one can find an economist to say whatever is desired, if they're paid enough.

Steve: I think you misunderstand the incentives. I don't know of a single economist who espouses things he/she doesn't sincerely believe. The pay is just opportunity cost, or sometimes below... what economists want is exposure for their views. You may be right that there is an economist for virtually any position, but what the payer is willing to pay doesn't corrupt the process -- it simply makes the position better known.

So basically the same as any other expert in any field ever?

The gun insurance is posed in the wrong form. Good people will pay for insurance. Criminals won't. Nothing will change. What's needed is a penalty on manufacturers and/or distributors.

For example, a $1 million penalty (strict liability) to the manufacturer for each homicide or accidental death.

Same for cars?

Nah, insurance on drivers is a better system. Insurance on gun ownership wouldn't work.

First because cars are easily tracked. Guns don't appear every day on public roads where they can be checked for insurance.

Secondly because guns are also have different economics. If a car manufacturer designed a car that kills many people efficiently, they would be sued out of business. If a gun manufacturer designed a gun that kills many people efficiently, they would be congratulated.

Third, because someone could buy a gun and quickly use it to kill people so the inconvenience should be put in place when they buy it. Reckless drivers usually take many months to kill people so it is more acceptable to charge them over time.

Insurance is a dumb idea. Why do so many dumb ideas spring up? Probably because politics only works when it is most broken.

The cars and guns issue is the same. You are talking about keeping cars and guns from people too irresponsible to have them.

'What’s needed is a penalty on manufacturers and/or distributors.'

Care to extend that idea to the media for incorrect reporting?

I think the turtle study was scooped:

(I don't remember the source, it could very well be from here or more likely kottke)

The turtle experiment sounds idiotic. How'd things turn out if one of the drivers swerving to avoid it crashed? How'd he run this past an ethics committee?

You did not read the article carefully: the turtles were out of the way, in the middle of the road, so the drivers had to swerve to hit them, not to miss them.

True. I re-read it now. Thanks. OTOH, were a turtle-aiming swerver to die in a crash would that be morally more acceptable?

Yes, frankly.

(your phrasing specifically said "morally" rather than "legally")

For some reason when I first read #4 I thought it said "Noah doesn't trust Kobo Abe" which would probably be a good idea.

# 6. I´ve never really understood the economic efficiency of high incomes. I still don´t. I do understand the inefficiencies.

The issue isn't "the economic efficiency/inefficiency of high incomes", it's the efficiency/inefficiency of actual policies that would have various effects on income. For instance, higher marginal tax rate provide a disincentive to earn more income. I'm not familiar enough with the literature to offer an estimate of the elasticity of taxable income for high-income individuals, but I am familiar enough with it so say it's positive: as marginal tax rates increase, taxpayers engage in behaviors like working less and receiving compensation in non-income forms. Causing those sorts of inefficiencies is part of having a tax system, and that's fine. Raising marginal tax rates may be a good and necessary thing to fund the things that need to be funded. But the inefficiencies are easy to understand and well-documented.

Hardly anything the government does is helpful or worth paying for, so there's that.

OK, well, I disagree with that. But that is a much more philosophical issue, and I will certainly not attempt to persuade you. By contrast, showing that there are inefficiencies caused by taxation is pretty straightforward.

#6. It sounds like they actually have a very good idea what they're in for, and are appropriately preparing for it. I do agree with their sentiments that multi-millionaires should be taxed differently than the $200-$300k income earners, but I think that implies taxes should just rise a bit more on that very small super-rich slice of the populace. That said, I do hope marginal income tax rate increases are made in the context of broader tax reform that takes into account the effect of eliminating certain deductions, which will of course impact middle income earners, who also need to contribute more.

"middle income earners, who also need to contribute more." or receive less.

The main benefits the middle class are receiving are simply what they've been promised--Medicare, Social Security, protection from bad guys. These are also the main drivers of government spending. These benefits just cost more than people have paid in, which is also more than the actuaries expected they would cost. Taxes should increase to cover these increased costs.

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