A Taxing Blog

Saturday, October 11, 2003
Reverse Brain Drain?  
Leiter Reports on buzz about academics fleeing Cal-ee-fornia in response to Governor Arnold. This is not the sort of buzz a new UC professor like to hear.

California should be fighting hard to maintain its regional advantage in the high-tech industries; a vibrant and healthy UC system is essential to this. Against self-interest, I'll note that protecting the sciences is probably more important than protecting the law school.

When politicians talk about states being competitive, it seems like they only focus on low state tax rates. But companies are clearly willing to overlook higher taxes IF, in return, they can tap into a network of experienced, creative, well-trained workers and can benefit from the work of others, including universities. If low tax rates was all that mattered, Alabama would be the VC capital of the world.

Thursday, October 09, 2003
 
A couple interesting tax articles published in the WSJ the past few days (WSJ registration required).

First, Arthur Laffer argues for a flat tax on business and individuals. His argument is that a flat tax would control spending during boom times but fund essential programs during bad times.

Second, Gary Becker (econ professor at Chicago), Edward Lazear (econ professor at Chicago) and Kevin Murphy (econ professor at Stanford) argue that tax cuts have two benefits: (1) lower tax revenues leads to lower government spending (which is good because the government is an inefficient spender) and (2) lower tax rates encourages more investment in "human" capital (that is, high progressive rates discourages the incentive to invest in valuable highly-paid occupations).

On a somewhat unrelated topic, Intuit apologized today to Turbotax customers for the antipiracy technology installed in the programs.

Alvin Rabushka reports that a canton in Switzerland, beginning in 2004, will actually switch to a degressive income tax. Should be interesting to keep on eye on whether that experiment works.


Wednesday, October 08, 2003
Governor Ahhhnold  
Well, at least we don't need a recount. What a blowout.

Among other things, it shows the Dems need to figure out how to find a better candidate than Bustamante. As I read the numbers, a significant number of people voted No on the recall and then voted for Arnold over Bustamante.

It's possible all of this can be traced back to Prop 13. I read this morning that the key problem is that it's pretty much impossible to both refuse to raise taxes and refuse to cut education spending, which is 40% of the state budget. (Can that be right??) If education is 40% of the state budget, it's because schools aren't getting funded at the local level at adequate amounts, and that can be traced back to Prop 13. We'll see what Arnold does about that.

Tuesday, October 07, 2003
Count one provisional hanging chad against the recall ...  
I cast my first vote in Caleeefornia today. It was a "provisional" vote -- I registered at the DMV 3 months ago, but they still don't have me on the voter rolls. It was also the first time I've used a punch card ballot. As I removed the card, I checked the chads --- and indeed two of the four chads were still quite attached to the card. I removed them with my hands -- hopefully not mangling the card too much. Somehow the mechanical ballots in New York, with the curtain and the levers and the big arm that you pull down, seem much more dignified and appropriate for voting.

Recount Mania '03 starts tonight. With all the absentee, provisionals and hanging chads floating around out there, I'd be surprised if we have a clear result for a while.

Monday, October 06, 2003
Impeach Grover  
A staffer from Treasury informs me that Grover Norquist is indeed influential in the White House. Sigh. And a minute ago I came across the following description of Norquist-Bush ties:

Norquist wasted no time forging an alliance with President Bush, traveling to Austin, TX to meet with then-Gov. Bush and his political advisor Karl Rove right after Bush’s 1998 reelection. Convinced that the Texas governor was the Right’s best hope, Norquist threw the full force of his influence behind the Bush campaign, playing a key role in defeating Sen. John McCain in the South Carolina primaries. So far, Norquist appears to be delighted with the new administration. On Pat Robertson’s 700 Club, Norquist said, “We is them, and they is us. When I walk through the White House, I recognize as many people as when I would walk through the Heritage Foundation.”


I had a phone conversation with someone who works for the Council of Economic Advisers a while back. He sounded pretty reasonable and un-Norquist like. Unfortunately I didn't have enough good things to say about the Bush tax cuts, and so my academic writings (and arguments) weren't much help to him. But at least he was a reasonable man, and reasonable minds can disagree about tax policy.

Reasonable minds, however, cannot conclude that the morality of the estate tax is equivalent to the morality of the holocaust.

Double Sigh.

I'm at a loss for what to do if indeed it's true that someone like Norquist is delighted with who he sees in the White House.

My options:

1) Write the Olin and Scaife foundations to try to get them to choke off Norquist's tax-exempt funding.

2) Volunteer for Wesley Clark.

3) Use the tax blog to persuade millions of readers that Grover is a big fat idiot.

4) Move to Canada.

5) Run for Governor of California. (Only 24 hours left before Ahhnold takes office.)

Suggestions?

Grover Norquist is a Big Fat Idiot  
Okay, I don't know if he's big or fat, but clearly an idiot, the Rush Limbaugh of the tax policy world. I heard Norquist, the President of Americans for Tax Reform, on Fresh Air last Thursday as I was driving home from work. Norquist said that the morality that supports the estate tax is the same morality that led to the holocaust. I haven't been able to find a transcript, so this is not quite an exact quote, but here's what I wrote down from the clip I got on line:

Norquist: ... 70% of Americans view the estate tax as unjust. The argument that some who play to the politics of hate and envy and class division will say 'Well, that's only 2%, or soon to be 5% in the near future, of Americans will have to be likely to pay the tax.' I mean, that's the morality of the holocaust. It's only a small percentage, it's not you, it's somebody else.

(Listen for yourself -- about 8:30 into the clip.)

Teri Gross, of course, followed up by asking if he really meant to compare the estate tax to the holocaust. Norquist replied that the morality of separating people out and treating them differently, whether based on race or class or religion or how much money they have when they die, amounted to the same thing. Norquist went on to compare the estate tax to apartheid and communism.

This actually made me feel a little sick to my stomach when I heard it. No, it's not the same thing as the holocaust. It's not the same morality. (1) Killing Jews and (2) requiring really rich people to give some money to the same government that protects them at home and abroad are really just not the same thing, and very different moral structures lead to those end results.

I've never really understood the tax protester movement, and now I'm not sure I understand the Right, or at least whatever wing of the right Norquist represents. The Americans for Tax Reform is a significant tax policy group; I'm hoping Norquist is an aberration and not the norm. Norquist should apologize or resign.

Sigh.





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