July 07, 2004

Why Oh Why Can't We Have a Better Press Corps? (Yet Another Washington Post Edition)

If Max Sawicky doesn't stop reading the Washington Post, he risks severe health status consequences:

MaxSpeak, You Listen!: SPECIAL TO THE WASHINGTON POST: Think tanks in Washington produce substantive reports with diverse political views. But few studies are honored by a full article in the Washington Post. By contrast, today a report utterly bereft of underlying documentation or rationale is one of those exceptions. Today we are informed is "Cost of Government Day," a canard cooked up by our old friend Grover Norquist of Americans for Tax Reform (sic). Today is supposed to be the day that income earned by "the average American" begins to outstrip the costs of taxes and regulations. This fake study.... Nowhere in the paper is the calculation of anything explained or sourced. Nowhere in the Post article is any dissenting voice cited. It might as well be an ATR press release.

It is not quite that bad. The reporter, Christopher Lee, makes one--one--one--single parenthetical (and by that I mean that it is contained in parentheses) criticism of ATR. But it is almost that bad. Max is right: it is a rewritten ATR press release. I wonder at what point Christopher Lee realized that for him "journalism" would consist of rewriting right-wing hack pieces and stuffing them into the news pages.

And this whole "working for the government" shtick.... On my way in, I passed local government at work: three police cars in front of a house, a serious road repair and reconstruction crew, and our local public school. It looked like they were all working hard. And I'm not working for them: they are working for me.

Posted by DeLong at July 7, 2004 12:14 PM | TrackBack | | Other weblogs commenting on this post
Comments

Too much time spent playing Count Dooku has undoubtedly gotten to him. Pathetic.

Posted by: MarkC on July 7, 2004 12:21 PM

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Hey, Brad, close that italic tag!

Posted by: Melanie on July 7, 2004 12:29 PM

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You're right. I'm going to switch to the New York Post.

Posted by: Max on July 7, 2004 12:46 PM

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But...but...
...if the gumint didnt have a monopoly on the police, roads and schools, highly efficient and noncorrupt private enterprises would suddenly spring up to provide those services at a lower cost, as is now happening in Iraq.

Posted by: Kuas on July 7, 2004 12:48 PM

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So we aren't taxed enough Brad? What is the appropriate tax rate for the average American? 40%? 50%? 60%?

On my way in to work I passed a liberal's wet dream...it is called the big dig. I also passed some more of the government working for me this weekend as I drove buy numerous government subsidized farms.

The government is working hard all right, they are working hard at growing as much as possible.

Posted by: wtf on July 7, 2004 12:48 PM

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Most of those government subsidized farms are in the control of Big Ag Bidness.

What the hell is the big dig?

The average American isn't paying those exhorbitant rates. The maximum 35% is what is called a marginal rate, which is what you pay on all income you, a single person, make in excess of $311951 AFTER DEDUCTIONS. Mind you, income below that amount is taxed at lower rates, so that someone making, so that you are paying at multiple rates up to that point. Thus your average tax is much lower than 35%.

Gee, if i was making that much money, i would be in pig heaven. i would be delirious about paying 35% taxes for any amount i made over $310K.

being an average American, though, my average tax rate is about 18%.

Posted by: Carol on July 7, 2004 01:04 PM

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> But...but...if the gumint didnt have a monopoly on the police, roads and schools...

The gubmint has a monopoly on these things? That's news to me. (Okay, the police have a special dispensation that private security forces don't have, but... we can privatize them too when the crunch comes.)

At some point, the gubmint becomes just another religious cult, handing out tracts (err... policy papers) on the street corner and dodging incoming fire and stray bomb-clusters with the rest of us. What a happy day that will be for Grover.

Posted by: s9 on July 7, 2004 01:19 PM

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I took at look at the ATR report (linked to at Instapundit). A number of things really stood out to me:

(1) Of the 6 months plus that ATR says it takes to pay off the aggregate share, two months of that is economy lost to regulation days. Aside from not attempting to show their math on this, I dont know how you could begin to calculate it. Did they factor in economy gained by regulation, such as damage saved by environmental regulation, or the increase in purchasing power that goes along with the minimum wage (e.g. imagine what would happen to Coke's sales if minimum wage was dropped to $2.00 an hour).

(2) Most of the graphs, which are meant to show the wild uptick in waste, or the huge gulf between Bush and Kerry, are not zeroed. For example, on page three a chart compares the difference in days worked under the tax plans for Kerry and Bush. The bar chart appears to have Kerry's plan taking about 150% longer than Bush's... except the chart only ranges from 187 to 191 days. If it were zeroed, you'd probably need a straightedge to figure out that Kerry's 190.53 was higher than Bush's 188.42 (oh, the horor!).

(3) War is referenced twice--once in a list, so sort of in passing, and the other w/r/t War on Terrorism related regulations. Call me crazy, but shouldnt there be a big huge caveat somewhere saying, "ignore all math--we're in the middle of a war." I guess there shouldnt be, since the report has no math either.

(4) I noticed that the cost of government per state chart doesnt reflect the subsidization of the red states by the blues--one would think that would make a pretty serious difference.

I could really spend all day on this chart (I already have 4 more, and I only skimmed it), but I have no training in this, and it bores me to do it.

Posted by: Doug on July 7, 2004 01:21 PM

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The "Big Dig" is the "depression" i.e. turning into a tunnel, Boston's Central Artery.

Where wtf was driving past government subsidized farms near Boston is anyone's guess.

Posted by: pfc on July 7, 2004 01:45 PM

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wtf wrote, "The government is working hard all right, they are working hard at growing as much as possible."

The biggest gainer recently at the federal level (in terms of budget-function level stuff) is probably the military budget.

So, wtf, are you willing to cut back on the military budget? Or are you one of the typical "government spending is a waste...except for that type of spending that *I* like" right-wingers?

Posted by: liberal on July 7, 2004 01:58 PM

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In response to wtf, these are numbers that are easy to look up.

Total government tax and non-tax revenue in the U.S. was equal to 31 percent of GDP in 2003. (Remember, GDP represents total national income.) This compares with an OECD (developed economy) average of 37.4 percent, with the range running from 30.9 percent of GDP in Japan--yes, the U.S. is near the bottom--to 59.3 percent of GDP in Sweden. I wouldn't favor Swedish tax ates, but it's generally regarded as a nice place to live.

Posted by: Matthew on July 7, 2004 02:11 PM

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"So, wtf, are you willing to cut back on the military budget? Or are you one of the typical "government spending is a waste...except for that type of spending that *I* like" right-wingers?"

Yes, cut back on the military too. If I am not mistaken, there was a recent attempt to close some more bases to save money but politicians from both parties blocked the measure because they didn't want to lose any bases in their districts.

Honestly, there are probably a thousand examples of government spending money that benefits a small special interest at the expense of everyone. I highlighted the Big Dig because it cost something like $15 B with much of it coming from the federal government. This means that people across the country are paying for a road that they will probably never use. The people who benefit are commuters in Boston and construction companies. (and they didn't even add any lanes beyond what the old road had!) And agricultural subsidies are another waste. Carol is correct in that most go to big Ag business. Why do they need subsidies and government protection? Do they think that people are going to decide one day that they are not going to eat any more? If they cannot survive on their own, too bad, they don't deserve to be in business. So when ATR declares today "Cost of Government Day" it isn't the exact math behind it that is important. Rather, it is the fact that there is so much waste and while it is popular for politicans to say that they are going to cut waste, few actually carry through.

Posted by: wf on July 7, 2004 02:12 PM

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Carol: "being an average American, though, my average tax rate is about 18%."

If your total tax burden is 18%, you're making well below the average income.

I'm not an average American this year, since I'm voluntarily out of work and back at school, but the last year I worked my total tax rate was MUCH higher than that. Start with payroll taxes -- about 15% for the self-employed. IIRC, my federal income tax rate was about 16%. My state income tax was about 4%. Where I live the total sales tax rate is 7%, but I don't spend all of my income and not everything is taxable, so say that's 4%. I own a house and my property taxes came out to about 2%. I have to pay auto registration fees and separate gasoline taxes, assorted taxes and fees on phone service, etc -- call that 1% when it's all added up. That gets me up to 42%. Trying to measure the "cost of regulation" seems hard to me, so I'll ignore that. 42% puts us early in June, rather than early in July, but still...

I'm not saying that I don't get good service for my taxes, particularly at the local level. Much like Brad, when I was out this morning I saw a police car, pulled over so the fire engine could go by, dropped books off at the public library, enjoyed the recently repaved road. Yesterday I bicycled on an extensive and well-maintained urban trail system.

Social Security makes the difference between my mother living comfortably in her old age and pinching pension pennies (or living with me and my family, which would probably drive us both crazy).

Posted by: Michael Cain on July 7, 2004 02:14 PM

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As a follow-up, any sensible "tax freedom" calculation should be based on the 31 percent total government revenue / GDP ratio (at least if we do the calcualtion on an average rather than median basis). That would put us 114 days into the year. GN's date puts us, I think, 186 days into the year.

Also, my figure isn't corrected for transfer payments, i.e.--social security payments or medicare benefits. Taking account of those would push the "tax freedom" day back even earlier.

Posted by: Matthew on July 7, 2004 02:16 PM

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Well, I forgot about Soc Sec and Medicare, and all the state stuff. In the heat of the moment. Most of the time when people rant about taxes, they're worried about the Federal income taxes, though, which are allegedly illegal and onerous.

Nonetheless, if you add in all the miscellaneous taxes and fees, I am sure that people pay on the average more than 18% in total taxes, as do I.

Self employed people get a rebate on their 15.3% Social Security contribution...lemmee see, the actual tax is about 14.2% on your first 87K of income. A truly regressive tax, but also an incentive to incorporate yourself so that you only pay Soc Sec on your salary...presuming all your income doesn't go directly into your bank account to pay for your taxes...etc.

Posted by: Carol on July 7, 2004 02:28 PM

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Michael, since the self-employment part of the payroll tax is deductable as a business expense, the effective rate for self employed is more like 12% than 15. I think you were being generous with a lot of the rest. For example I figure I pay sales tax on about 20% of what I put money out for. YMMV

Posted by: Eli Rabett on July 7, 2004 02:32 PM

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One important point often lost sight of in discussions of the Bush tax shifts is the increase in state and local taxes that are the direct result of program cuts made to pay for those shifts. I haven't seen numbers, and attributing a specific tax increase to particular policies is no doubt difficult, but it seems clear that the effect exists. Most, of course, are regressive.

Posted by: Jonathan Goldberg on July 7, 2004 03:13 PM

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Indeed, my number was too high and Carol's original was too low. The Tax Foundation has a nice table breaking things down by states at http://www.taxfoundation.org/statelocal03.html

They peg this year's Tax Freedom Day at April 11. Interesting that Colorado, where I live, ranks 40th in terms of state/local burden, but jumps to 13th when Federal taxes are included. We must not be as good at sheltering our income from the IRS as many of the other states.

Posted by: Michael Cain on July 7, 2004 03:48 PM

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“On my way in, I passed local government at work: three police cars in front of a house, a serious road repair and reconstruction crew, and our local public school. It looked like they were all working hard. And I'm not working for them: they are working for me.”

If someone works for me, I can fire him. If someone works for me, I can hold him accountable for the work he does. Can I fire any of the employees the local public school? I don’t think so. If the road repair and reconstruction crew fails to perform, can I hold them accountable for damage to my car? No! Sovereign immunity. My “employees” have failed me several times, and in a big way. The negligence of the Oakland Fire Department caused my house to burn down. Can I hold them accountable? “No” says Judge Agritellis (another one of my employees) of the Alameda County Superior Court. “Sovereign Immunity” When I called the Oakland Police when my life was in danger and they didn’t come, can I fire them for non-performance? I don’t think so. I don’t think any these people “works” for me, at least in the ordinary sense of the term.

Posted by: A. Zarkov on July 7, 2004 04:15 PM

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Some thoughts:

Taxes are blown way out of proportion in this country. I can't think of another as obsessed as we are. With that said, my effective tax rate this past year, according to TurboTax software, was 11.5%. This is after writing off my house, home/office and a host of other stuff.

The idea of potential, extremely burdensome overtaxation is too often out of sync with reality. At the least, the ones that think so should get a good accountant or tax software and see if the arithmetic is being done correctly. Many years back, H&R Block pegged my rate at 29% but that's another story altogether.

Also, taking a general indicator like basic infrastructure, things like roads have been neglected (as measured by rising congestion and time to desintation data for all major US cities); it's apparent to anyone in rush hour traffic today that we need to put more monies just to keep up with maintenance (not to mention traffice growth or invest in new forms of mass transport).

Also, when alluding to seniors retiring rich off their Social Security bonanza doesn't jive with the actual savings rate of Americans in general, much less the many seniors who don't have enough to retire and are in the poorhouse. You may have noticed more and more of them these days, working diligently at your local supermarket, Home Depot, or KFC outlet. And as baby boomers retire, this trend will get a lot worse off, with Social Security being their last resort (conservatives included, who by then will be more progressive one imagines).

Lastly, the conservative belief that business and markets are the most efficient, always more infallible than government, and are the best avenues to providing social goods and are suitable proxies for making the best choice for society at large ignores the malfeasance and short-term profiteering of one time supposedly standard-bearing companies entrusted with the public's confidence (e.g. Enron, MCI, Qwest, all the way back to Chrysler's Iaccoca objecting and lobbying against air bags, smog laws blah blah blah because of cost concerns, etc.).

Pretty common sensical to me, but I suppose too often people of faith hooked to black & white ideologies just can't see things outside the walls they were taught.

Posted by: Ted Hu on July 7, 2004 05:27 PM

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Msgr. Zarkov: So a solution could be a private community with its own private police force, fire department, and repair crews, all incented with year-end bonuses based on their performance.

Wonder how much that would cost. But at least you can fire them.

Posted by: Ted Hu on July 7, 2004 05:48 PM

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“So a solution could be a private community with its own private police force, fire department, and repair crews, all incented with year-end bonuses based on their performance.”

I’m not suggesting that at all. I simply want some accountability as opposed to no accountability. Let’s do away with sovereign immunity for a start so a citizen could sue the city and recover damages. How about we dismiss the fire chief when his department fails in a big way like the Oakland fire? My larger point is that we should not regard government workers and officials as “our employees.” The reality of the situation is more complex.

I think if you add federal income tax, state income tax, sales tax, property tax, utility taxes and the business taxes passed on to us in the prices of the goods and services we buy, you will get something like 30% as an effective tax rate. But taxes are the price we pay for civilization, it’s not so much the rate we pay, but the value we get in return. Moreover we are sometimes forced to purchase things that many of us don’t want, or wouldn’t want if we knew how much they actually cost.

Posted by: A. Zarkov on July 7, 2004 07:03 PM

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A. Zarkov: we'll have to change Supreme Courts to do away with sovereign immunity. Rehnquist has explained the divine right of sovereign who can do no wrong. Seminole Tribes, and the excrable Alden v. Maine are jewels in the strict constructionist crown, now aren't they?

Posted by: masaccio on July 7, 2004 07:29 PM

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re; privatizing public services.
The example that I am most familiar with (not very) is that of an earlier fire department. In the late day of the Roman Republic, one gentleman got rich putting out fires. When a fire broke out, one of his teams would show up and let the fire burn until the property sold his land. Always for pennies on the dollar.
Also, at the turn of the century, the two police forces of New York (both private) fought pitched battles with each other.
In terms of tin-foil hat territory, how about rumors that surface on occasion regarding anti-virus companies drumming up new customers via the release of new computer viruses?

Posted by: linnen on July 7, 2004 07:40 PM

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Re: private v public goods and services

Has anyone ever tallied up all the cost of private market inefficiencies as a % of the private sectors % of GDP (anually) - (eg) Enronesque behavior, plain old fashioned mis-management resulting in lost equity value, displaced labor, etc, unproductive profit seeking via lobbying, monopolistic behavior, etc, etc, etc - and then compared these costs with a tally of government inefficiecy as a % of the public goods/services % of GDP?

Just curious because I think it would be an interesting study.

Posted by: avedis on July 7, 2004 08:20 PM

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Whether Social Security should be considered a tax is moot. Is it not essentially insurance against dire poverty in old age? The fact that it is a pay-as-you-go program is no reason not to view it as insurance. Motor vehicle and home insurance, too, are funded mostly on a pay-as-you-go basis. If they were government-administered, would that cause us to consider the payments a tax?

Posted by: jm on July 7, 2004 10:03 PM

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masaccio: I believe New York State does not claim blanket sovereign immunity. I recall people successfully suing New York City over damage done to their cars from potholes. On the other hand, in California you can’t make a claim against a governmental entity for negligence. But even in CA sovereign immunity does not immunize the state against willful acts. For example Rodney King sued the LA police.

Posted by: A. Zarkov on July 7, 2004 11:33 PM

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jm: I don’t SS qualifies as “insurance.” It’s really an intergenerational income redistribution program. There is no concept of a premium proportional to risk in the SS program. The SS benefit is a very non-linear function of the amount paid in. So the return for a low-income employee is much greater than for high-income employee. Look at the payout formula on the SS website.

Posted by: A. Zarkov on July 7, 2004 11:43 PM

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AZ,

The linguistics of the argument are questionable. "Working for" can mean either "employed by" or "working for the benefit of." Beyond that, yeah, we need more accountability. Elections are a pretty indirect way of influencing the day to day operations of government. My passing familiarity with other forms of citizen involvement in governmental decision making suggests that elected officials and their employees have the system pretty well rigged. Outcomes are very little influenced by public comment, or by big fires.

Posted by: kharris on July 8, 2004 04:45 AM

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Zarkov:

I believe soverign immunity only applies to states, and not sub-state governments. So you can sue a city all you want. My guess is that King sued L.A., not CA.

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