Krugman: Obama and Redistribution

[ProSense]

Obama and Redistribution

Some notes for myself: how much impact have Obama’s policies actually had on current and prospective inequality?

The main policies to consider are PPACA (the health reform) and ATRA (the fiscal cliff deal with its associated tax rise).

I’m not a fan of the Tax Foundation’s work, but their analysis of the distributional effects of Obamacare looks about right: significant benefits to the bottom half of the income distribution, paid for largely by taxes on the top few percent (the Medicare surcharge and the extra tax on investment income). The Tax Policy Center — whose work I do trust — has the Act reducing the after-tax income of the top 1 percent by 1.8 percent, the top 0.1 percent by 2.5 percent.

Meanwhile, ATRA raises taxes relative to a continuation of the Bush high-end tax cuts: after-tax income down 4.5 percent for the 1-percenters, 6.2 percent for the top 0.1 percent.

Putting this together, we have a roughly 6 percent hit to the 1 percent, around 9 to the superelite. That’s only a partial rollback of these groups’ huge gains since 1980, but it’s not trivial.

http://krugman.blogs.nytimes.com/2013/01/20/obama-and-redistribution/

[ProSense]

1. Kick! n/t

[ProSense]

2. No comments? n/t

[ProSense]

3. Boy, are my

legs tired.

[NashvilleLefty]

4. I love Krugman!

He may not always understand politics, but he is THE economist! Loved his interview with Bill Moyers.

[hfojvt]

5. Krugman is such a tool

and probably a member of the top 5%

"Meanwhile, ATRA raises taxes relative to a continuation of the Bush high-end tax cuts: after-tax income down 4.5 percent for the 1-percenters, 6.2 percent for the top 0.1 percent."


Because the real fact is

"Meanwhile ATRA CUTS taxes relative to the EXPIRATION of the motherfucking goddam Bush tax cuts"

after tax incomes UP 2.3% for the 1 percenters, and UP 3.2% for the 4 percenters.

It's not a rollback of those people's huge gains - it is a permanent continuation of them.

$1.3 trillion in tax cuts for the top 5%
$370 billion for the bottom 40%

ATRA is INCREASING inequality and Krugman should fucking know it.

[ProSense]

6. Dumb point.

"Meanwhile ATRA CUTS taxes relative to the EXPIRATION of the motherfucking goddam Bush tax cuts"

The fact is that it raises taxes on the top one percent even more than expiring Bush tax cuts. Sure some of those up to $400,000 benefit, but it's a permanent shift of taxing the top to benefit the bottom.

<...>

Perhaps the best prism through which to see the Democrats’ gains is inequality. In the 2008 campaign, Mr. Obama said that his top priority as president would be to “create bottom-up economic growth” and reduce inequality...In the 2009 stimulus, he insisted on making tax credits “fully refundable,” so that even people who did not make enough to pay much federal tax would benefit. The 2010 health care law overhaul was probably the biggest attack on inequality since it began rising in the 1970s, increasing taxes on businesses and the rich to pay for health insurance largely for the middle class.

As part of this week’s deal, Mr. Obama did make several major compromises. He accepted much less in overall tax revenue than the government would have received absent any deal. He allowed a payroll-tax cut, which applied to most households, to expire. And he yielded both on aspects of the estate tax and on the level at which the top marginal income-tax rate would start, moving it to $450,000 for couples, from $250,000.

Still, using inequality as a yardstick, he won much of what he had wanted. By holding firm to a top rate of 39.6 percent — up from 35 percent — he locked in a substantial tax increase for the very richest, who have received the biggest pretax raises in recent years.

On average, the top 0.1 percent of earners — whose incomes start at $2.7 million and go much higher — will pay $444,000 more in taxes in 2013 than they otherwise would have, according to the Tax Policy Center. The increases stem from both the fiscal deal and the new taxes in the health care law...the deal preserves the “compassionate conservative” part of President George W. Bush’s tax agenda — reducing federal income taxes on the working poor, sometimes to zero — while limiting the parts that most helped the affluent.

- more -

http://www.nytimes.com/2013/01/03/us/politics/for-obama-fiscal-deal-is-a-victory-that-also-holds-risks.html

[hfojvt]

7. bullshit

and unlike Krugman, I do NOT trust the Tax Policy Center

they are pretty clearly carrying water for Obama.

Here's one simple and very clear example.

Mitt Romney has $4.9 million in dividend income.

If the Bush tax cuts had been allowed to expire he would have paid a rate of 39.6% taxes on those dividends which would have then been treated just like any other income.

Instead, thanks to the betrayal of ATRA they are only taxed at 20%. Saving Romney almost $960,000 a year in PERMANENT tax cuts.


The fact that Obamacare will raise taxes on Romney starting in 2013 is not relevant to the betrayal of ATRA except that dishonest liars like Obama, Krugman and the Tax Policy Center are using that juxtaposition to lie about the impact of ATRA.

But go on, tell me again how cutting the tax rate on dividends to 20% is actually an increase in taxes on the rich. Because if Krugman says it or Obama says it then it MUST be true.

[ProSense]

8. Your analysis is bullshit.

You also consistently leave out the increase in capital gains rates, which is where someone like Romney makes most of his money.

[hfojvt]

9. what increase in capital gains rates?

oh, you mean the one that happened when the Bush tax cuts expired? That one?

Because here's the way it actually happened.

Happy new year, it is 2013 and the Bush tax cuts have finally expired. Now capital gains are taxed at 20% instead of 15%.

Later in the day, we are betrayed by the passage of ATRA. Which some say increase the tax rate on capital gains to 20%, but they lie because that increase happened automatically with the expiration of the Bush tax cuts.

But I guess we should be happy, because Obama could easily have cut them to 17% and then lied and claimed he raised them to 17%. After all, Obama claims he raised the estate tax rate to 45% even though the prior expiration of the Bush tax cuts had raised that rate back to 55% and ATRA came in and CUT it down to 45%.

It's too bad for Obama that ATRA was passed AFTER the Bush tax cuts expired, because that makes it a little bit harder to lie and say you are raising taxes when you are really cutting them on the rich.

Well, it would make it harder if anybody in the M$M bothered to call them on it. Good thing people in the M$M are too busy counting their money to care about those at the bottom.

Here's another easy example. Krugman himself probably saves $6,000 a year in taxes because of ATRA. Not exactly an earth shattering sum, but he saves it every year until he retires, and considering that the car I drive was purchased for $3,500 I don't think that Krugman can actually relate to somebody like me.

Oh, and how is my analysis bullshit? Is 20% really bigger than 39.6%?

[ProSense]

10. Like I said,

"Later in the day, we are betrayed by the passage of ATRA. Which some say increase the tax rate on capital gains to 20%, but they lie because that increase happened automatically with the expiration of the Bush tax cuts. "

...your analysis is bullshit. In fact, it's bullshit on top of bullshit.

"Here's another easy example. Krugma himself probably saves $6,000 a year in taxes because of ATRA. Not exactly an earth shattering sum, but he saves it every year until he retires, and considering that the car I drive was purchased for $3,500 I don't think that Krugman can actually relate to somebody like me."

[hfojvt]

11. no offense, but that isn't an argument

it is just contradiction.

In fact, it is contradiction on top of contradiction.

Did I say something wrong about Krugman? I don't know how much he makes, but he is said to have bought an apartment for $1,700,000. My own house cost $35,000. http://www.huffingtonpost.com/2009/08/13/paul-krugman-buys-new-yor_n_258399.html

His net worth is said to be $2,500,000 http://www.getnetworth.com/paul-krugman-net-worth/ approximately twenty times mine.

He is, in fact, not walking in my shoes.

[ProSense]

12. The anatomy of bullshit:

"Did I say something wrong about Krugman? I don't know how much he makes, but he is said to have bought an apartment for $1,700,000. My own house cost $35,000. http://www.huffingtonpost.com/2009/08/13/paul-krugman-buys-new-yor_n_258399.html "

...when your analysis is based on guessing how much Krugman makes.

[hfojvt]

13. that wasn't the basis of my analysis

and considering the cost of that apartment, it would seem I UNDER estimated his income by a few hundred thousand a year. He needs to make at least 1/5 of the cost in order to be able to afford that apartment. Which would make his income at least $340,000 a year. The average income of those in the top 4% is $278,500 and their average tax cut from ATRA was $8,930.

The fact that Krugman is praising this deal, just might, possibly, have something to do with how much he gains from this deal.

It's more than slightly possible and you do not refute anything until you provide an actual figure for how much he does make. Because you probably don't know either. Whereas I have provided some evidence to back up my theory.

[ProSense]

14. You make no sense. n/t

[Egalitarian Thug]

15. Criticizing the system, when it works so well for him, makes for a rather sizable blind spot.

And he's a member of the top 1%.

[ProSense]

16. Is this a case of

"Criticizing the system, when it works so well for him, makes for a rather sizable blind spot. And he's a member of the top 1%."

...attacking Krugman for his analysis or is it ODS?

[Egalitarian Thug]

17. Your TLA is meaningless to me. But, it is human nature. n/t

[ProSense]

18. Yes,

"But, it is human nature."

...a gratuitous attack is "human nature."

[hfojvt]

19. usually I think of him as being on our side

although he was seemingly a Hillary supporter during the primary.

He was calling for Obama to stand firm before the cliff, but that may have been concern about the spending side. Almost nobody seemed to be looking at the tax side - just taking it as a given that "keeping 78% of the Bush taxes" was a good deal. When the reality is that it was a deal that heavily favored the top 20% over the rest of us.

Krugman should know better.

[Egalitarian Thug]

20. I agree that he is definitley on our side, but being a very rich economist,

his views are definitely skewed.

Besides, it's not like their are any alternatives to at least a grudging support for the policies coming out of the White House, so we get this screw "Main Street more slowly than the other guys would" strategy. He fully understands what was done, but it is done and there's no up side to railing against it now.