Semi-Daily Journal

Why is there a need for a liberal think tank? The left already has the Center on Budget and Policy Priorities, the Urban Institute, the Center for Law and Social Policy, and the Brookings Institute - all pretty left-leaning, and all producers of more or less impeccable policy analysis. It seems to me a left-leaning Heritage Foundation will only undercut credibility, and will lead to sloppy and tendentious work.

Hardly any honest person respects the Heritage Foundation's analysis - isn't it model or the main competition for the liberal think tank?

The pleasing difference with radical right think tanks like American Enterprise and Heritage and Cato will be the difference between dishonest propaganda and truthfulness. radical right dishonesty needs to be countered continually.

Why we need honest think tanks -

August 28, 2003

MORE ON CALIFORNIA TAXES
Paul Krugman

Aha. Somehow I forgot about another source of information of California taxes: the Institute on Taxation and Economic Policy study on the distribution of tax burdens. It actually sheds considerable light on the whole business.

First things first: ITEP is more or less part of Citizens for Tax Justice, a definitely liberal think tank. However, while CTJ's ideology dictates their choice of topics, I've always found the work itself impeccable. This is in stark contrast to the folks at the Tax Foundation, who through the 90s deliberately tried to confuse their audience. (Basically, they pretended that the surge in federal revenue during the late 90s - which mainly reflected huge capital gains in a bull market, and was not the result of increased tax rates - meant that ordinary families were facing higher taxes. Naughty, naughty.)

Anyway, the ITEP study estimates the state and local tax burden for each state and the nation as a whole. Specifically, it estimated tax burdens given 2002 tax rates, but using data on the 2000 distribution of income. So it doesn't reflect the effects of the collapse of the tech bubble. But what it says is interesting.

Here's the comparison:

Group Nation California
Bottom 20% 11.4 11.3
Next 20% 10.3 10.2
Middle 20% 9.6 9.2
Fourth 20% 8.8 8.7
Next 15% 7.7 8.1
Next 4% 6.5 7.6
Top 1% 5.2 7.2

Nationally, state and local taxes are highly regressive, and have become considerably more regressive over time. California's system is regressive, too, but not as much so as the national average. The result is that the typical California family pays less than the national average, but the well-off pay more.

So this is an alternative explanation of Ahnuld's remarks about the burden of taxes: he wasn't just mouthing right-wing cliches, he was reflecting what he sees. The kind of people he hangs out with do pay substantially higher taxes in California than they would if they lived in a red state. But the great majority of Californians aren't wealthy, and they also aren't highly taxed by national standards.

Now you could try to argue that California's "class warfare" - a system that is less regressive than the national average - drives away businesses and jobs. But as I've already pointed out, there's no evidence of that in the data.

In the article above, Krugman is either lying or he just doesn't know what he's talking about --

Regarding the Tax Foundation:
"(Basically, they pretended that the surge in federal revenue during the late 90s - which mainly reflected huge capital gains in a bull market, and was not the result of increased tax rates - meant that ordinary families were facing higher taxes. Naughty, naughty.)"

This is absolutely false.

During the 1996 Presidential campaign, when Bob Dole tried to use Tax Foundation numbers on total tax payments going up during Clinton's first term, the Tax Foundation's senior economist was all over the media explaining that Dole's charge was unfair since the surge in revenue was driven by economic growth -- people making more money paying more taxes.

Anyone who disagrees with Krugman is dishonest, apparently. Tax Foundation really does seem to put out honest numbers and explain what they think those numbers mean. More importantly, they publish enough data so that others can critique it. They're at least as credible and forthright as the organizations Krugman cites.

August 26, 2003

Paul Krugman

The most recent census data on state/local tax burdens by state is for fiscal 2000. In that year, California collected taxes equal to 12.0 percent of personal income, slightly above the national average of 11.2. However, this number was surely swollen by the tech bubble. Because of Prop 13, California relies much more heavily than the average state on income taxes, and income tax receipts bulged as long as Silicon Valley was giving away lots of stock options....

The Tax Foundation has tables that purport to show tax burden for 2003. I don't know what their data sources are. I'm not inclined, however, to treat them as a reliable source. They are the people responsible for "Tax Freedom Day", which purported to show that typical families faced ever-higher taxation during the late 1990s, when in fact tax rates were stable or falling.

"The Tax Foundation has tables that purport to show tax burden for 2003. I don't know what their data sources are. I'm not inclined, however, to treat them as a reliable source. They are the people responsible for "Tax Freedom Day", which purported to show that typical families faced ever-higher taxation during the late 1990s, when in fact tax rates were stable or falling."

* Krugman may not know what the Tax Foundation's data sources are, but I'm pretty sure that he has internet access. He could find out quite easily since TF is generally quite explicit about sources.

* Krugman is purposely confusing "tax burden" and "tax rates" since the Tax Foundation is VERY clear about how they use each term differently and what that different is -- (http://www.taxfoundation.org/taxfreedomdayQA.html) tax burden = total receipts/total tax collections and tax rates = the legal rates.

Surely Krugman is smart enough to know that a tax rate can fall while collections can rise. They are two entirely different things.

Separately, while FEDERAL rates are falling, state rates are on the whole not falling.

So once again Krugman is simply obfuscating. He surely knows better.

Just to follow on from the original post a little...

A name has meaning only to the extent that it identifies a think tank (or whatever) from others, and particularly from its opposites. As long as no one would join a "Center for American Regress", or an "Institute for Poverty and Repression", the name "Center for American Progress" is meaningless.

Perhaps life would be easier if all these think tanks would just call themselves "Center for Good Things" and append a number.

Hume writes:

"Hardly any honest person respects the Heritage Foundation's analysis - isn't it model or the main competition for the liberal think tank?"

I don't know about the Heritage Foundation, but the American Enterprise Institute is very respectable, and includes name brand experts in a number of fields. The Brookings Institution respects AEI enough to have joined the latter in a cooperative venture called the AEI-Brookings Joint Center for Regulatory Studies.

The AEI is certainly not "radical right", as Lise would have it. It is mainstream conservative. Another organization that Lise calls radical right, the Cato Institute, is libertarian. Libertarianism is radical, but to call it rightwing is misleading, since libertarians are add odds with conservatives on many issues.

The word "radical" should be used to mean something besides "someone whose views are opposite to mine".

Gary,

(1) How does what Bob Dole was saying in '95/'96 based on what-needs-be still older data disprove Krugman's statement "they pretended that the surge in federal revenue during the late 90s - which mainly reflected huge capital gains in a bull market, and was not the result of increased tax rates - meant that ordinary families were facing higher taxes."
(2)Any table that puports to show a 2003 tax burden must be considered suspect as the data necessary to make such a claim, can't possibly have been collected just yet.

(3)The Laffer curve to the contrary, tax collections fall when tax rates fall. they aren't two entirely different things because there is a fairly fundamental mathematical relationship between the two.

If the AEI isn't radical right, that just shows how far right the conservative movement has gone in this country.

Reply to Joe Pundit:

I would say the situation is just the opposite. Conservatism in this country has mostly cleaned up its act and become moderate and reasonable. Of course there are few blowhards and loose cannons like Ann Coulter, but that's showbiz.

By contrast liberalism has gone so far off the deep end that it isn't liberal any more. On the nation's campuses there are draconian "speech codes", and you can be sued or disciplined just for saying something politically incorrect. Racial discrimination in admissions policy is widely practiced, and that nefarious practice has become practically a religion in liberal circles. On many campuses the instruction in the humanities and social sciences should no longer be called education. Instead it is blatant indoctrination in anti-Americanism, anti-capitalism, and sometimes anti-Semitism as well.

Joe Willingham wrote, "I don't know about the Heritage Foundation, but the American Enterprise Institute is very respectable, and includes name brand experts in a number of fields."

Let's see who are among the "outstanding" fellows at AEI:
* Robert H. "mob rule" Bork
* Newt "if it's just oral sex, I didn't sleep with you" Gingrich
* James K. "Dow 36,000" Glassman
* John Lott (for a thorough debunking, see:
http://www.cse.unsw.edu.au/~lambert/guns/lott98update.html
)
* Michael "Iran-Contra" Ledeen
* Charles "r^2 is but a footnote" Murray

and so on...

"Conservatism in this country has mostly cleaned up its act and become moderate and reasonable."

Surely you must be joking---"moderate" includes deliberate plans to bankrupt the federal treasury, I suppose.

"By contrast liberalism has gone so far off the deep end that it isn't liberal any more. On the nation's campuses there are draconian "speech codes", and you can be sued or disciplined just for saying something politically incorrect."

Straw man. "The nation's campuses" hardly constitute "American liberalism".

Hume wrote, "The left already has the Center on Budget and Policy Priorities, the Urban Institute, the Center for Law and Social Policy, and the Brookings Institute - all pretty left-leaning, and all producers of more or less impeccable policy analysis."

I more or less agree with that, but Brookings is overall not center-left; it drifted rightward, and while I think they have a lot of very good analysis, a more appropriate label would be "centrist".

Joe Willingham writes: "The AEI is certainly not "radical right", as Lise would have it. It is mainstream conservative."

They have someone on staff, Laurie Mylroie, who just published a book in which she says (without evidence) that Al Qaeda is in fact run by Iraqi agents. She's in serious tinfoil hat territory. (This is the caliber of nutjob who is influencing our foreign policy. She's not far away from "precious bodily fluids" territory.)

They sure as heck aren't mainstream. Nor are they conservative.

I'm left wondering what exactly they think the American Enterprise is, and whether it might be more accurate if it were named the American Empire Institute.

President Bush's deficit spending isn't conservative, just the opposite. Quite a few conservatives have pointed this out.

Stephen is right: Brookings is really centrist. And more power to them.

The problem is even if I try to think as a conservative, I do not see how we can meaningfully cut spending unless we really slice up social benefit programs that have already been limited. There is always spending excess, but not on the order that we could come close to budget balance. Revenue will be the issue.

Remember we may be in for quite an increase in spending, if we really mean to build Iraq.

Ann, I generally agree with that. When there is a war, the taxpayer has to pay for it. I am thoroughly and unequivocally opposed to the latest round of tax cuts. But what about the fact that social spending has grown much faster under Bush than it did under Clinton (7% per annum versus 3%, something like that)? That led somebody at the Cato Institute to say that in regard to the economy, Clinton was a much better conservative than is Bush.

We need a social safety net, but the trouble is that spending on education and health care tends to infinity. There is no end to the educational programs and medical benefits the government can fund. We send this problem in Europe, where countries like Germany and France are in deep financial trouble due among other things the hypertrophy of the welfare state.

We need to put constraints on the growth of spending on the welfare state and insist on spending the money where it is really needed. For example, instead of adding an across-the-board prescription benefit for seniors pay only for drugs for seniors who don't otherwise have coverage and who can't afford to buy it.

Another thing the federal government needs to do is stop imposing mandates on states and localities and not funding them. Yet another thing the federal government, and state and local government as well, need to do is to stop the explosion in litigation against both governments and corporations. If Enron or somebody really does wrong they should be sued six ways 'til Sunday. But there is far too much unjustified litigation, and there are far too many laws which encourage this unfortunate phenomenon. There is no free lunch: you and I end up paying for all that.

The biggest fiscal problem of all is the effect of the aging of the baby boomers on Social Security and Medicare. Unless those programs are reformed, they are not going to be able to meet their obligations. Neither party has spoken honestly about this issue.

What Willingham's statements above really show is that (and this is hardly news) "Left" and "Right" are tremendous oversimplifications when you're dealing with multiple political issues -- they're meaningful ONLY to the extent that you have a 2-party system which pretty much forces people who differ with each other on many issues into reluctant coalitions.

Thus the fact that -- while Bush's berserk deficit spending arguably ISN'T conservatism as it used to be -- it is nevertheless enthusiastically supported by a landslide majority of those Americans who call themselves "conservatives" in opinion polls.

Other classic examples:

(1) The fact that self-described "libertarians" -- depite the fact that, on social issues, they're much closer to the Democrats -- nevertheless vote mostly Republican, because they consider economic and military issues more important then social ones.

(2) The fact that -- until the civil rights revolution of the 1960s -- this country actually had three major parties, since Southern Democrats were far more opposed to Northern Democrats than to Republicans on racial and social issues, but were pretty much between Northern Democrats and Republicans on economic issues. (In 1968, a National Review editorial furiously denounced George Wallace's presidential bid on two grounds, which they called equally important: he was against equal voting rights and civil rights for blacks, and he was -- shudder -- "quite close" to Hubert Humphrey's economic views.)

So, if you're going to insist on dividing Americans into just two groups, dividing them into "Democrats" and "Republicans" actually makes far more sense than dividing them into "liberals" and "conservatives". And if the US actually had a logical voting system allowing runoffs or instant runoffs (and thus allowing the political strength of centrist voters to be fairly represented), the true dispersal of political views in this country (or in any other democracy) would be vastly more obvious.

Reply to Bruce Moomaw:

I agree with you that the liberal-conservative dichotomy is misleading. For example Brad deLong and the people at the Nation magazine are both called "liberals". But in fact they have little in common. Prof. DeLong is pro-western, pro-American, pro-rationality, pro-market. The people at the Nation are soft-core Marxist-Leninists. Throughout the Cold War they sided with the Soviet Union, and they have never repented that affiliation. To call them and someone like Prof. DeLong both "liberal" is to invite confusion.

On the right the so-called paleoconservatives are isolationist in foreign policy and in favor of small government and states' rights, along with traditional social values. The neoconservatives are in favor of a foreign policy which is a muscular version of old time liberal internationalism. The two schools dislike each other as much as both do the various tendencies known as liberalism.

Explain how instant runoff voting would work, and how it would strengthen the center at the expense of the extremes, rather than the opposite. The idea is an intriguing one.

There are a number of schemes for it. The usual one is that every voter votes for however many people he finds aceptable for an office, and also ranks them in numerical order of preference. Then, if no one has 50%, you eliminate the worst finisher and add the second-choice votes of his supporters to the other candidates' totals. If still nobody has 50%, you eliminate the NEXT lowest finisher, and add the second-choice votes of his voters (plus the highest-ranking votes by the previous eliminee's voters for all the still-remaining candidates) to the remaining candidates -- and so on, in a kind of cascade, until someone among the remaining candidates finally goes over 50%.

It's rather Rube Goldbergian, and there are other systems -- MIT proposes a much simpler one in which every voter simply votes for however he many candidates for an office he finds "acceptable" WITHOUT ranking them, and the candidate who gets the biggest total of "acceptable" votes is called the winner.

Alternatively, of course, you can simply have a runoff election between the top two finishers in the first election -- but this can lead to weird results such as Le Pen getting into the runoff in France. It also allows also-rans to make secret deals with one of the two final candidates in return for an endorsement -- and, of course, it means the expense and time of a whole additional election. Any of the instant runoff schemes avoids all these problems.

But ANY electoral scheme that allows ANY kind of runoff allows political centrists to avoid their current quandary: a relative centrist can clobber either a Leftist or a Rightist, IF he can get nominated by one of the two parties -- but he usually can't. John McCain is just the latest example. On the average, each party nominates someone in the middle of its own ideological spectrum -- which means the average Democratic nominee is to the Left of 3/4 of the voters, and the average Republican nominee is to the Right of 3/4 of the voters. Institute a runoff system of some sort, and people at the current ideological center of the US electorate WILL start winning most of the elections -- which also means that the ideological fights in Congress would be tremendously less bitter, and there would be tremendously less gridlock.

Bruce described PRSTV or AV (the difference depends on how many seats there are by constituency or district) Ireland operates a system of PRSTV with multi seat (usually 3-5) seat constituencies and has VERY centerist policies. So it probably does work in that way. There is a pretty vast literature on this in Ireland (check out Michael Laver for one but just go to any Politics department in an Irish Uni) but the main criticism in Ireland is that it leads to clientalism and an overconcentration on local issues - simply put much pork.

Question to Bruce M.: do you know whether there is instant runoff voting anywhere in the US?