Well, If Feldstein Says So

So it turns out that Will Wilkinson and Megan McArdle both seem really impressed that Martin Feldstein has some research showing tax cuts are teh awesome.

So now, what, I can go Google and take us back to the time when The Economist did an "informal poll" of economists and found that "More than seven out of ten respondents say the Bush administration's tax cuts were either a bad or a very bad idea, and a similar proportion disapproves of Mr Bush's plans to make his tax cuts permanent." What's the probative value of an informal poll like that? I have no idea, but The Economist is a pretty rightwing outfit on economics and even employed Megan in the past and Will currently, so it's not clear what motive they might have to shade the results in a lefty tilt. And of course yesterday I had Jason Furman's table. And we're all familiar with Brad DeLong's blog. And Atrios' for that matter. According to Bryan Caplan (PDF) "economists tend to be moderate Democrats."

I guess I'm honest enough to concede that none of that proves my more anti-tax friends and colleagues wrong, but the point is that their tendency to try to make it out to be that only economic illiterates disagree with them is ridiculous. They're free to take up an unpopular minority viewpoint, but that's what it is. There are plenty of cranks and a vast sea of corporate lobbyists who back the general thrust of the modern Republican Party's approach to taxes; the reputable economic researchers who agree with them, though real, are also relatively few in number.

Comments

I would definitely not say the economist is right wing in terms of economics. It certainly leans left politically.

Posted by Dave | September 7, 2007 5:48 PM

Now that you both get paid from the same till, is it going to continue to be the case that every day brings yet another reference to and commentary on McArdle's uneducated blather, as if her posts contain anything worth considering seriously?

Posted by Arr-squared | September 7, 2007 5:49 PM

Now that you both get paid from the same till, is it going to continue to be the case that every day brings yet another reference to and commentary on McArdle's uneducated blather, as if her posts contain anything worth considering seriously?

I frequently write posts attacking arguments that I don't think are "worth considering seriously." If I'd thought the McArdle/Wilkinson argument in this case was worthy of serious consideration, I would have given it serious consideration. Instead, I called it "ridiculous."

Posted by Matthew Yglesias | September 7, 2007 5:53 PM

Unfortunately, I made the mistake of linking to the two posts. OMG, puerile doesn't even begin to describe the arguments they make let alone the logic of the person they cite.

There are certain people who believe what they believe because it makes things easier on their brains and conscience. There are some people who will take the contrarian view to the nth degree far beyond any rational limit. There are the happy few that are capable of extraordinary levels of cognitive dissonance that would cause a mere mortal's head to explode. And there are those who have never experienced any pain or discomfort in their life and walk through their days "without a care in the world".

It's been my experience that arguing with any if these people is rarely worth it.

Posted by Rihilism | September 7, 2007 6:02 PM

And Matt Yglesias is impressed by shoddy analysis by Jason Furman showing tax cuts are teh suck.

Also, attitudes towards tax policy will largely be determined by attudes towards distributional justice once a basic level of economic knowledge is obtained. Beyond that, you're just learning how to better stack the deck when you make an argument or better catch other people when they are.

Posted by MattXIV | September 7, 2007 6:13 PM

MattXIV:
"Also, attitudes towards tax policy will largely be determined by attudes towards distributional justice once a basic level of economic knowledge is obtained. Beyond that, you're just learning how to better stack the deck when you make an argument or better catch other people when they are."

I think this is right on. I wonder, how much evidence has been collected to suppor this? It sounds eminently plausible on the surface.

Posted by Rickm | September 7, 2007 6:35 PM

If tax rates are 0%, then revenues will be zero, and raising the marginal tax rate will raise revenues. If the marginal tax rate is 100%, then people will either not work or will expend considerable effort in avoiding the tax (either legally or illegally), and lowering the tax rate will raise revenues, as it becomes cheaper to pay the tax than to avoid it. In any real world situation, therefore, there must be a cross-over point. If marginal tax rates are below that point, raising them will raise revenue; above that point, raising them will reduce revenue. The question is, what does the curve look like? This is an empirical question, not an ideological one. But no Republican will ever admit that any tax rate is the right rate – every tax rate by definition is always too high. to the committed supply-sider, revenues can always be raised by cutting taxes. Every real economist appears to believe that we are well below the cross-over point, but the ideologists aren't interested in facts.

Feldstein (as far as I can tell from the abstract, I’m not interested in buying the article) does not claim that we are above the cross-over point. He is talking about something else entirely. He says that, if you raise taxes from some presently existing “high marginal tax rate” – not defined – then for every dollar of tax collected, the economy as a whole will produce $0.76 less in GDP. Or, in reverse, if you cut taxes, then for every $1.00 not paid in taxes, the economy will produce $0.76 more in GDP. This is not an argument that raising taxes will raise revenue; the reverse is true. Feldstein is saying that raising taxes, even at high marginal tax rates, will raise revenue. He just wonders if the increase in government revenue is worth the drag on the economy. But since Feldstein agrees that cutting taxes will cut revenues, he must agree that cutting taxes requires cutting spending - e.g., no new wars in Asia that we can't pay for. The supply-side argument is that you can cut taxes for free- the tax cut pays for itself. Feldstein hasn't drunk that Kool-Aid.

Feldstein’s main point comes at the end of the abstract. He says that taxation on labor income has a lesser deadweight loss effect than taxation of investment income. Therefore, in order to minimize the deadweight effects of taxation, we should tax wages and salaries but not return on investment. This is an argument in favor of funding the government by taxing workers and letting hedge fund managers keep their loot. Not an aspect of the article that Will or Megan seem to have appreciated.

Posted by Bloix | September 7, 2007 6:45 PM

Hmmm, this reminds me of a debate I just read over at Sadly No..... (http://www.sadlyno.com/archives/7065.html)

Posted by Nonblogger | September 7, 2007 6:48 PM

What the hell is going on? It is foolish to talk of tax cuts as good or bad, because you starts with income base, then you mix in progressive rates, bring it up to a boil with deductions, credits, offsets, and recognition events, and sprinkle in some sales, excise and payroll taxes and now no one can actually comment reasonably on goodness or badness of the rates.

But if we are talking specifically of Bush's tax cuts and whether to renew them, then I'm not surpised seven out of ten respondents call them a very bad idea. But assuming all criticism has to do with with rate reduction is as wrong as assuming they improved our location on the laffer curve. No one knows where optimum is on the curve, so you can't really "improve" your position.

But even ardent tax cutters & simplifiers (ahem) think the mid-year tax refund, double-tax fix, accelerated depreciation, Section 199 deduction (gack!), estate tax fetish, and sunset provisions (all technically tax "cuts") were stoopid. I hope that doesn't make me and the many other tax professionals who complained of these cuts liberals (except in the European sense, that'd be OK).

If you are speaking exclusively of the income tax rate on individual taxes, its pretty small fry and I doubt anyone can point to its impact on the economy or on government revenues (assuming dynamic scoring) because of all the other noise (e.g., the dividend cut caused many to accelerate income, increasing revenue in the short term).

Posted by Béziers | September 7, 2007 7:13 PM

The thing I don't get is that the `drain' of taxes on the 'productive economy' seems to me morally exactly the same as the `drain' of rentiers on the 'productive economy'.

I mean, it's somewhat true that "Everyone wants to live at the expense of the State. They forget that the State lives at the expense of everyone."

But it's equally true that "Everyone wants to live off their investments. They forget that their investments must live at the expense of everyone."

I don't understand the obtuseness of someone like Feldstein, coming up with these huge estimates of deadweight loss and other government harms, seemingly not realizing that, no matter how low the taxes, a large and stable rentier class surely can't be the greatest social arrangement for growth & progress.

Gene Lyons said it well, I think:

The danger to individual freedom posed by self-aggrandizing bureaucracies public and private seems to me greater every day. In putting it that way I mean to distinguish myself from the intellectual survivalists of the extreme right -who lampoon all public agencies save the military, but express only reverence for banks, insurance companies and multi-national corporations.

Posted by roublen | September 7, 2007 7:18 PM

Ding! Daily McArdle link.

Posted by jim | September 7, 2007 7:53 PM

i agree completely with Bloix: i don't want to spend five dollars to see what creative arguments feldstein came up with to produce the numbers he produced.

the larger discussion here though has the usual curious quality of any discussion with self-professed libertarian arguments: there is no libertarian constituency in america.

taxes don't exist as an end in and of themselves: they exist to fund government programs. Unless and until mcardle or wilkinson or feldstein or anyone else can show us on what basis they think the political support exists to reduce the scale of government in the economy, i don't really care what their arguments about proper ways to think about taxes are, since they exist in a parallel universe.

in this universe, i don't have to theorize about the costs of deficit spending: they are very real in the form of higher interest rates, crowding out, and a loss of some degree of strategic power due to the importance of foreign capital funding our deficit. We can either allow those costs to continue or we can increase taxes, theoretical deadweight costs notwithstanding.

i have no idea what mccardle and wilkinson thought in 1993, but i'm sure that feldstein was among those who assured us that those horrible costs associated with the Clinton tax hikes were going to tank the economy. Like iraq hawks, you would think they would have the decency to shut up on this matter having been proven so spectacularly wrong.

PS. Matthew, the issue with Megan McArdle is this: a lot of us think she is reliably ridiculous, as much as a bunch of others out there. Until she joined the Atlantic, you managed to persevere perfectly well without having to link very often too her. now you deal with her arguments on an almost-daily basis. she doesn't deserve the attention....

Posted by howard | September 7, 2007 7:56 PM

Until she joined the Atlantic, you managed to persevere perfectly well without having to link very often too her. now you deal with her arguments on an almost-daily basis. she doesn't deserve the attention....

I second and triple that. Except change "almost-daily" to "daily."

Posted by jim | September 7, 2007 8:16 PM

I join howard and jim, and triple their ante. Libertarian views on taxation are not even masturbation (which has positive value) but pure hokem. Megan doesn't even do those views justice, and contribute nothing to anything. Sadly No sure has her correctly characterized.

Posted by JimPortlandOR | September 7, 2007 8:30 PM

nah, MY is in the right on this question.

i don't mean the taxes (he's in the right on that, too),
but rather the question of whether he should spend his time
refuting right-wing nonsense like mcardle.

answer: yes. it has to be done.

it's what MY always say when people ask
"why do you bother refuting jonah goldberg? it's like shooting fish in a barrel!"

the answer is: you have got to refute these people,
or the right-wing noise machine gets no push-back whatsoever.

now, no one thinks that MY is pals with jonah,
or paid from the same payroll as jonah.
he ain't.
so his smackdowns of mcardle have nothing to do with being pals
or on the same payroll with her either.

it's just what delong calls "intellectual garbage pick-up"--
one of the unpleasant tasks that the smart must perform
when surrounded by the stupid.

at the same time, MY--you have shown good taste in making jonah a firm enemy,
and i think the same policy would be advisable vis a vis mcardle.
friends like that you don't need--stupid can rub off on you, and so can dishonest.

Posted by kid bitzer | September 7, 2007 8:30 PM

kid bitzer, just to offer a refinement: attacking tax-cutting stupidity in the republican party is an excellent way for matthew to spend his time.

refuting mccardle's notion that delusionary tax-cut evangelists dominate republican discourse: not so excellent.

Posted by howard | September 7, 2007 8:36 PM

Megan McArdle is far from perfect but she writes well and her arguments are generally sensible. What amazes me is the arrogance of some of her left-wing foes who think they can just wave off Martin Feldstein or Gary Becker with a couple of insults.

Posted by Isocrates | September 7, 2007 8:37 PM

er, refuting mccardle's notion that delusionary tax-cut evangelists DO NOT dominate republican discourse: not so excellent.

Posted by howard | September 7, 2007 8:37 PM

What Howard said. Taxes should track government spending and pay for programs. If the public wants spending at a certain level, you need the revenues to support that, and the economic effects of taxation are secondary.

Now, it is true that you can construct various arguments for the economic effects of taxation that can justify SHORT TERM tinkering with taxes (so long as over the long term, you collect enough revenues to fund programs). BUT-- listen up folks-- CONSERVATIVE ADVOCACY OF TAX CUTS IS NOT CONTEXTUALIZED AND THEREFORE DOESN'T OFFER US ANY METRIC AS TO WHEN TAX CUTS ARE JUSTIFIED. If you want long term tax cuts, then you have to have long term spending cuts, because otherwise you aren't able to pay for programs. If you want short term tax cuts, then (1) they need to be short term, not permanent, and (2) there need to be times when a tax cut is NOT a good idea (and indeed, times when it is necessary to raise taxes).

For instance, with respect to Feldstein's claim (which dates to Keynes actually) that tax cuts can provide an economic stimulus. That may be true (although how much of one and how calibrated of one are big issues). But the big question is, when do you want to have a stimulus and when do you not want to have one? A stimulus during a recession? Sure. A stimulus when the economy is growing and close to full employment? No way-- indeed, you may want a contractionary tax increase to forestall inflation.

McArdle may be right that there are plenty of serious economists who advocate tax cuts-- but NOT THE WAY CONSERVATIVES ADVOCATE THEM. Not all the time. Not as the solution for every problem. Not as something that should never be reversed. Not as something that jeopardizes the long term financing of government programs. Not to the exclusion of tax increases at other points in time.

Posted by Dilan Esper | September 7, 2007 8:57 PM

Megan McArdle is far from perfect but she writes well and her arguments are generally sensible.Posted by Isocrates

If I had to share an office with her I'd certainly reach for the hemlock...pa dum dum chee...

Posted by Rihilism | September 7, 2007 9:09 PM

Its not just evangelical Republicans that don't want tax increases. You have pretty broad opposition, whether it be laffers, starve the beastites, economists, wingnuts or people who just think it morally wrong.

Despite controlling Congress, tax increases aren't even on the Democratic legislative agenda because of lack of support- Congressmen know they'll get hammered on it, especially blue doggers. Hillary says she'll let some expire, but I think that's as good as you got and i'm sure she'll tack back to equilibrium in the general campaign.

The deficit is no reason to raise taxes. Have you seen the rates on Treasury bills? You'd be crazy not to borrow and put your money to more productive uses. Pretty much anyone who's run a business is comfortable with debt financing, as are you college students who have to pay your own way.

Posted by Béziers | September 7, 2007 9:15 PM

Keep in mind there is a distinction between the "tax policies" of the Republicans and the "tax and spend" policies. Virtually everyone agrees that the Bush tax cuts, without spending cuts, aren't even really tax cuts. Who should favor that? If we consult a list of Nobel Laureates, one can see that a minority -- but a sizeable and highly respected minority -- would favor a combination of tax and spending cuts for modern America. That is what I would favor and my guess is the same for Megan. By linking that to "the Republicans" you are making it sound more squirrely than it really is.

Posted by Tyler Cowen | September 7, 2007 9:17 PM

I would definitely not say the economist is right wing in terms of economics. It certainly leans left politically.

What.

Posted by Julian Elson | September 7, 2007 9:59 PM

One might also do some googling regarding what the Wall Street Journal eds and their ilk were saying about the long term doom and gloom after Clinton's 1993 progressive tax hike. After the wildly successful 90's economy and massive gov't surplus, shouldn't those naysayers have issued some sort of apology?

Also, Bloix nails it pretty good further up there.

Posted by ed | September 7, 2007 10:08 PM

Chait himself has just referred us to his Dec. 2004 review of the accuracy of Feldstein's past economic pronouncements, which compare impressively to those of Gen. Custer: http://www.thinkingpeace.com/pages/arts2/arts310.html .

Posted by Bruce Moomaw | September 7, 2007 10:10 PM

The daily McArdle link!

C'mon, Matt, whatever policies do or don't exist at L'Atlantique is clearly beside the point. I don't see you linking to Ambinder, whose blog might as well be called The Daily Dishwater. You're doing the cyber-equivalent of dunking Megan's pigtails in the inkwell. Well, hey, here's hoping it works.

Posted by ho | September 7, 2007 10:44 PM

tyler, one can accurately label the notion of tax cuts without offsetting spending cuts "republican" because this is precisely what the party has given us every time it has had the chance.

now, it's all well and good to say you "favor" a smaller government and taxes pegged at the level necessary to support that smaller government, and it's certainly true that that's the honorable and honest conservative position.

but it's time that honorable and honest conservatives started acknowledging reality: the republican party isn't interested. it's interested in all tax cuts, all the time, and spending cuts would be nice if they happened, but not so important that you'd actually, you know, not create major new spending programs like the medicare prescription drug benefit and the war in iraq.

until honest conservatives reclaim their party, they're going to have to live with the fact that the republican party is full of nuts who hate empiricism and love sloganeering: of course they sound "squirrelly." they are.

PS. as for feldstein, i have no doubt that he's a perfectly fine professor of economics, but bruce moomaw beats me to the punch: his track record is underwhelming.

Posted by howard | September 7, 2007 11:15 PM

thanks for the link, Bruce. I remember coming across a paper Feldstein wrote early-mid 90's that argued that the deadweight loss from the Clinton tax plan was so large, that repealing it would actually increase revenue.

What I was wondering was that taxes are supposed to be bad, because they reduce incentives to work. And you have tons of papers arguing this. And government handouts are supposed to be bad, also because they reduce incentives to work.

But surely nothing is a greater disincentive to work than having a steady investment income? So how come we don't have tons of economic papers decrying the `deadweight loss' of being a rentier?

There's a blindspot in the methodology, I think, that systematically overstates the harm of government, and understates the need for government, when it comes to economic growth and prosperity.

Posted by roublen | September 7, 2007 11:29 PM

Hey Tyler,

The point isn't that there are reasonable republicans. We know this is true. The point is that as a party, republicans are unreasonable. The party in general will use any claim, without regard to truthfulness, to advocate for tax cuts. The majority of the republican party is not remotely near your position on taxes, Tyler. I don't know how many hits you get on your blog (which is great), but Rush Limbaugh has 3M listeners weekly. Larry Kudlows audience is pretty big too. Your views are getting swamped by the nuts who want to cut taxes all the time, so the gov'mnt don't take my mony, the economy will grow at 100% a year without inflation, and there will be ponies for every child.

Megan made a bullshit claim (The republican party is not held hostage nutcase economic policy), and is now trying to change the subject.

I stopped reading her for about 18 months because I just got tired of the attacks on liberals that were backed by the flimsiest logic and talk radio quality facts. She is occasionally interesting, and I bet pretty nice and funny in person. Frequently, a kindness comes across in her writing that many other people do not have. Her personality isn't the point.

As a political blogger, she are responsible not only for her views, but the views she provides political cover for. Megan, again and again provides cover for the irresponsible tax cutters of the world. That she does it with a pleasant smile and intelligence doesn't make it any more palatable to me.

She thinks she is being reasonable, holding out an olive branch, when she says that people who are calling out the "cutting taxes raises tax revenue" crowd are doing "Gods work". Well, I have yet to see her do this gods work on her own. Riddle me this - if this meme of cutting taxes = free money isn't so omnipresent, why is pointing it out and fighting it "God's work"?

Posted by mickslam | September 7, 2007 11:32 PM

Martin Feldstein is a crank. I use as my sole piece of evidence that he has written on tax policy for the Wall Street Journal Editorial page.

Posted by mickslam | September 7, 2007 11:34 PM

beziers, i did just remember, while looking back here, that it's very sweet and all that you think long-term interest rates are going to stay as low as they are now forever, and it's very sweet that you think it's always going to be in the interests of foreign central banks to support the US deficit as an export subsidy, but the reason to raise taxes is that neither of these is a good long-term bet.

Posted by howard | September 8, 2007 12:57 AM

Martin Feldstein is a hack, and Gary Becker is a nut. Are we supposed to be too impressed by their fancy degrees or institutional affilations to see the obvious truth?

Posted by Walt | September 8, 2007 1:07 AM

posted at Megan McArdle's place, but I don't thinbk she loved me anymore since she held my comment for "approval":

I. "That, however, is not the tax policy of the Republicans; their policy is 1) cut taxes, 2) pretend that the tax cuts will be self-financing (remember that every major contender for the Republican nomination believes this),

Okay.

I'm not an economist.

I don't even have a bachelors in ANYTHING. I'm working on it, but whatever.

However, I like to think I have a good bull**** detector. I also like to think that bull**** is intensified when arguments take place in the rarified air of the imagination, instead of the real world of politics and taxes (and rent, bills, credit cards, etc).

Now.

This is what I understand "self-financing" to be. Please correct me if I'm wrong. I apologize for explaining through a thought experiment, especially after complaining about escaping the real world, but this is my comment, so bite me:

I make $10,000. It is taxed at a rate of 15%.

10,000 x .15 = $1500.

In their infinite wisdom, the Powers that Be decide to reduce my tax rate in the hopes that I become a Serious Capitalist and Help the Economy Grow Like Dandelions.

But.

The Powers that Be, in order to sell this Awesome Tax Plan to those who expect taxes to actually benefit the public (i.e., those of us who like bridges to stay up when we drive over them, or who would like a building to be rebuilt after terrorists knock it down), sell it as "self-financing". I take this to mean that my tax cut will be so awesome, and so Inspiring to my Capitalist Instincts of Virility and Energy, that I will actually make so much more money that even at my lower tax rate I will pay more in raw dollars than I did before. For instance:

$16,000 x .1 = $1600, which is more tax paid, even though my tax rate went down by 1/3.

My question to the audience at large is this:

1) Has there ever been an instance in the history of life on this planet where this idea was put into successful practice? Meaning, can anyone provide hard data showing that the consequence of a lowered tax rate actually inspired the American public to such a flurry of productivity and wealth creation that tax revenues increased despite the lowered rate?

I ask this because irregardless of wonky arguments about health care tradeoffs and what Megan had to drink last week, I think this really has been an article of faith in American national politics since at least 1980-by letting you keep more of your money, the government will be able to do more once you've become rich from keeping that money.

Quite frankly, it sounds like a Ponzi scheme on a terrifyingly huge scale.

Am I wrong?

Posted by jonathan | September 8, 2007 11:19 AM

jonathan, "nominal" revenues increase all the time, thanks to inflation and a larger work force. "real" revenues generally increase.

think about it this way: aggregate taxable income is $100. tax rate is 20%. tax revenues are $20.

aggregate taxable income goes up to $105. tax rate is cut to 19.5%. tax revenues are $20.47.

Posted by howard | September 8, 2007 2:22 PM

think about it this way: aggregate taxable income is $100. tax rate is 20%. tax revenues are $20.

aggregate taxable income goes up to $105. tax rate is cut to 19.5%. tax revenues are $20.47.

That doesn't answer my question at all. I totally made s*** up as an intellectual excercise for the purpose of illustrating that "self-financing" tax cuts are inherently dishonest; that is, the depend upon incomes increasing to the point where the raw dollars earned exceed the proportion implicitly lost due to a lower tax rate. All you did is take my deliberately wacky and extreme example and make it appear more "reasonable". Apparently, to paraphrase what GB Shaw said to the young lady, we've already established that the basic principle is sound, and now all we're doing is haggling over details[1]. My more fundamental question was whether there is a real life where the tax cut inspired a rise in incomes/wealth that caused tax revenues to rise above the level they would have been before the cut. I don't think that question is smart-alecky or gotcha! at this point, since it appears to be the basic claim underlying the Laffer curve, and as has been noted both in these pages and others, it is tatamount to an article of faith among republicans. Fair enough.

Prove it. Show me the money. Otherwise, it's nothing more than a "post hoc, ergo propter hoc" argument, as silly as claiming that spring is caused by the migration of geese into Canada.

Posted by jonathan | September 8, 2007 5:34 PM

[1] According to an apocryphal anecdote, George Bernard Shaw once met a fine figure of a young woman at a party and asked if she would sleep with him for a million dollars. Her reply was, "Of course. I'd be stupid to turn down such a large sum." He then asked if she would sleep with him for five bucks. "I've never been so insulted!", she replied. "What kind of woman do you think I am?"

"I thought we'd already established that," he said. "All we're doing now is arguing over price."

Silly Victorians. Obviously no parallels there to modern times. We're so much more advanced than that.

Posted by jonathan | September 8, 2007 5:41 PM

jonathan, i have no idea what is setting you off here, but on the chance it's a basic misunderstanding: i am not arguing that tax cuts magically create more revenues.

i am simply noting that for several reasons, cutting taxes does not have to lead to an absolute decline in the level of revenue collected.

in simple fact, no one can possibly know whether tax cuts lead to anything, for the simple reason that we don't have a test tube in which to conduct two parallel tests, one the exact same economy with a tax cut and one without.

but what we can know are two things: tax cuts are not a magical elixir for gdp growth and tax cuts do not "pay for themselves" as the term is generally understood (that is, they do not raise as much revenue as the "original" tax rate would have).

stick with those two points and you're fine; try arguing that it's impossible for revenues to rise after a tax cut and you look like (and are) a fool.

Posted by howard | September 8, 2007 9:54 PM

My patience with Megan M., already often strained, shattered completely over her comment about the Lancet study of casualties in Iraq.

On ideological grounds, she wished to discredit it. A slight technical problem: she knows neither statistics, nor survey research, nor conditions on the ground in Iraq. Why then should she write on the subject at all? One may well wonder.

What she did was to talk about how long it takes her to make macaroni and cheese. I'm not making this up or taking it out of context. Deltoid, regularly excellent on this stuff, comments, with references, here:

http://scienceblogs.com/deltoid/2007/03/london_times_hatchet_job_on_la.php#more

I could cite as many more examples as anyone could reasonably ask, but my digestion won't take it. She is a vile, disgusting hack. I can't tell whether The Atlantic having hired her indicates that they're deranged (perhaps subtype "we need a raving right-wing nutcase around to demonstrate our journalistic independence from reality) or merely senile.

Posted by Another Jonathan | September 9, 2007 1:45 AM

jonathan, "nominal" revenues increase all the time, thanks to inflation and a larger work force. "real" revenues generally increase.

think about it this way: aggregate taxable income is $100. tax rate is 20%. tax revenues are $20.

aggregate taxable income goes up to $105. tax rate is cut to 19.5%. tax revenues are $20.47.

Leave Jonathon alone, Howard, can't you see he's been traumatized (seriously, like all of us) because the The Atlantic has seen fit to continue Megan's gainful employment (she has a right to her opinion, but it seems that we have an abundance of opinion, or a veritable cornucopia of opinion on the web, and personally, I think most people expect a little higher reasoning level and a bit more stringent quality control from the pundits or "analylists" or "other" that are given The Atlantic's imprimatur.

And before you go calling Jonathon a fool, consider the speciousness of your own hypothetical.

Posted by Rihilism | September 9, 2007 7:15 AM

Speaking of more stringent quality control, I forgot the closing ")".

Someone find me an editor, please...oh, that’s right, I’m not a journalist…

Posted by Rihilism | September 9, 2007 7:58 AM

rihilism: i agree with the traumatic affect of exposure to mccardle!

however, do please explain what is so "specious" about noting reality: tax cuts do not generally reduce nominal revenues.

Posted by howard | September 9, 2007 11:11 AM

however, do please explain what is so "specious" about noting reality: tax cuts do not generally reduce nominal revenues.

The question Jonathon asked was:
1) Has there ever been an instance in the history of life on this planet where this idea was put into successful practice? Meaning, can anyone provide hard data showing that the consequence of a lowered tax rate actually inspired the American public to such a flurry of productivity and wealth creation that tax revenues increased despite the lowered rate?

I refer to your hypothetical ($20.47 > $20) as specious because you didn't answer his question ("...inspired the American public to such a flurry of productivity, etc...."). Also, "thanks to inflation", $20 can be seen as "equal to" or "greater than" $20.47 and thus the government sees no "real" increase in revenues. Inflation affects the value of money as well as it's quantity. I guess I would call the $20.47 or "$0.47" the "gross" revenue increase, not "real" revenue increase, though, not being an economist, I may be missusing the term in the technical sense. Either way, I don't feel that Jonathon asked a foolish question.

Posted by Rihilism | September 9, 2007 4:40 PM

And..., though I, like I assume a lot of people do, tend to breeze through the comments looking for "teh funny", I don't think that Jonathon ever claimed that "cutting taxes does not have to lead to an absolute decline in the level of revenue collected". Though I may be mistaken...

Posted by Rihilism | September 9, 2007 4:50 PM

Sorry, should have said, "...does have to lead to..."

Posted by Rihilism | September 9, 2007 5:19 PM