Paul Krugman: “Soak The Rich”

Krugman - Soak the Rich

Paul Krugman wants the U.S. government to soak the rich, and he openly said so during an appearance on HuffPost Live on the date of 22 October 2014.

“What you really should want to do is to soak the rich as much as possible,” Krugman said in an appearance on HuffPost Live Wednesday afternoon. “So the top tax rates should be whatever it is that collects the most revenue, and now the question is, how high is that?”

The above-quoted story about Krugman comes straight from the Huffington Post. You can read the story by clicking here.

In other Krugman news, Paul Krugman writes the following in a recent NYT column of his:

American politicians don’t dare say outright that only the wealthy should have political rights – at least not yet. But if you follow the currents of thought now prevalent on the political right to their logical conclusion, that’s where you end up.

Go figure.

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  • Brucehenry

    Are you implying there is some inconsistency between the interview and the column? If so what is it?

    And do you have some argument against the assertions in Krugman’s column? It seems to me to be stating a perfectly reasonable case.

    • Sky__Captain

      I don’t see any inconsistency. I believe the column is presented as an example of Krugman’s foolishness, as is the Puffington Host bit..

      Only a true progressive (one that is truly blind to reality) would believe that only the wealthy have political rights.

  • Mjolnir

    It is amazing that in the face of overwhelming evidence that “soaking the rich” harms the economy and that tax rates higher than a nominal point result in decreased government revenue, Krugman still posits such pap.
    Economists have even indicated that the revenue maximizing point on the Laffer curve is too high, and the ideal tax rate where maximum economic growth is achieved is actually lower than that.
    So what we have here is Krugman advancing a tax policy that is destructive to not just the wealthy but to the entire economy.
    As for his nonsense about the right wanting only the rich to have political rights, he’s just not even in touch with reality there. That’s just his partisan shilling.

    • Luca Candela

      There is no evidence whatsoever of what you just stated.

      • Vagabond661
        • Brucehenry

          Yes the Laffer Curve concept has a certain logic but it appears to suggest the optimum rate should be about 50% you OK with that?

          Most of the morons blathering on and on about the Laffer Curve don’t know what it means or what it implies. And the credibility of supply-side economics took kind of a hit in 2008 if you recall.

          • yetanotherjohn

            “So the top tax rates should be whatever it is that collects the most revenue, and now the question is, how high is that?”

            That quote from Krugman is essentially stating Laffer’s curve. That there is a point in which either raising or lowering taxes would result in less taxes collected. If you raise the tax rate, people choose to work less, take compensation in non-taxable forms etc such that the total tax revenue decreases. If you lower the tax rate, the incentive to work more is not balanced by the straightforward math of a lower tax rate. The proof of this can be found in past tax cuts and raises. Raising tax rates has tended to not produce as much revenue as expected and lowering tax rates has not cut revenue as much.

            Krugman identified one of the problems with this idea in that identifying that point is difficult. Further, identifying it is a moving target over time as expectations and options change. Further, the tax rate is not in a vacuum internationally, so as things change in other countries that optimal tax point changes. But the most fundamental problem with the idea is one that seems to be beyond Krugman and most liberals in that it is not a zero sum game. Maximizing tax rates to maximize tax revenue can lead to lower tax revenue because of lost opportunity in the economy.
            Since 1949, increasing regulation has cut US economic growth by an average of 2% per year. In other words, if we hadn’t been increasing regulation our economy would be $58 trillion not our current $17 trillion. So a flat 10% tax would have been $4 trillion more. Agreeing that not all regulation is bad and positing that new regulations were “halved” so that they were only 1% drag on the economy, we would be at $32 trillion economy instead of $17 trillion. At the same tax rate, we would be almost twice the tax revenue.
            But no, the left insist, despite all evidence to the contrary, that if we just add enough regulations, distort the economy enough and put the right people in charge, all things would be better. Perhaps a little more humility on the left, a lot less regulation on the economy, a much smaller government and we could all enjoy much more. I suspect that if this was done, we would first need less tax revenue and second would find it much easier to set a tax rate that balances the books relatively easily.

          • Brucehenry

            Your wishful thinking and what-ifs are not “all evidence to the contrary.”

          • Vagabond661

            Your one sentence reply does not refute his evidence either.

          • Monadology

            You speak nonsense. 2% per year over 50 years is 100%. You mean we’ve had no economic growth since 1949? Huh?
            Where do you get this stuff?
            We like clean water.

          • fustian24

            Actually 2% over 50 years is much larger than 100%.

            You need to look into the miracle of compound interest.

          • Brucehenry

            Good snark

          • yetanotherjohn

            The statement was that we averaged 2% less than what we would have had sans the regulation. Thus the $17 trillion we have grown to would have been $58 trillion. Your answer is a good example of why liberals aren’t as smart as they think they are and shouldn’t be allowed to run governments.

          • Monadology

            Your example is of wingnut ideology projected onto the inside of your cranium. You claim the know what would have happened if …
            Of course you know nothing of the kind. You pull the 2% number out of nowhere and take it as fact.

          • Vagabond661

            From the site:

            “However, the Laffer Curve does not say that “all tax cuts pay for themselves” as many people claim. What is true is that tax rate cuts will always lead to more growth, employment, and income for citizens, which are desirable outcomes leading to greater prosperity and opportunity. There is, after all, more to fiscal policy than simply maximizing government revenue.”

          • Vagabond661

            And if you want to talk about supply side econ, then consider this link:

            http://www.laffercenter.com/supply-side-economics/

            “In fact, as it stretched into 2007, this 25 Year Boom saw a tripling in the net wealth of U.S. households and businesses from $20 trillion in 1981 to $60 trillion by 2007. When adjusted for inflation, more wealth was created in this 25 year boom than in the previous 200 years.”

            And as you pointed out about 2008, Obama was elected. Remember that? Businesses were so afraid what he would do that projects and expansion were postponed. I experienced that first hand.

          • Brucehenry

            Perhaps more wealth WAS created. In whose hands is it now? Not the working class, that’s for sure.

          • Vagabond661

            The government’s hands of course.

          • Brucehenry
          • Vagabond661

            Do you know who owns the most land in the US? Do you know who employs the most people in the US? What one entity has more money than anyone?

          • Vagabond661
          • Brucehenry

            The wsj video, although it claims this guy “debunks common myths,” doesn’t actually even address except obliquely the “myths” it claims it is debunking. And then the guy pulls out the tired old canard of blaming the poor for their poverty. Yawn.

            The Thomas Sowell opinion piece is typical Sowell. It slays me that somebody who sneers at Wikipedia uses two silly citations like these as somehow invalidating statistics shown in the Wiki article.

            Btw the Wiki article was about WEALTH inequality and you showed me two links about INCOME inequality.

            Also btw do you know how to ask irrelevant questions? Yes you do, at least three of them anyway.

          • Vagabond661

            Sigh….My point was that the government is the richest among us. They own the land, collect the taxes and exempt themselves from what it imposes on us. Over time they have morphed from being public servants to being royalty.

            While we argue about income equality, they are making millions while being in office (who else does that in the private sector?). While we argue about Obamacare, they exempt themselves from it with their own health plan which extends after they leave office.

            They get us fighting amongst ourselves, making us believe that WE are the problem. “Them damn Liberals” “Those asshole Republicans” We fall for it time after time and they keep getting elected over and over. I mean, damn c’mon.

            BTW, Do you really consider Wiki a credible news source? Is that a relevant question for you?

          • Brucehenry

            Doctors and dentists among many many others accumulate millions in net worth over time, not just politicians. Most government workers do NOT accumulate that kind of wealth. Politicians maybe, but regular schlubs who go to government offices day after day year after year not so much.

            I agree with your next to last paragraph though. What do you suggest? You seem to me to be as partisan as anyone else.

            We are (or were) talking about WEALTH inequality BETWEEN CITIZENS, not the size of government. OF COURSE the government has more wealth than any individual citizen. That’s irrelevant to anyone’s argument when talking about wealth inequality. Some people, influential with the powerful government because of the wealth they already possess, have advantages that those with less wealth do not have.

            Wikipedia can be useful if not the be-all and end-all for information. In the particular article I cited the bias is pretty obvious in the way it’s written, but the statistics it cites are valid. In any case it’s often more credible than op-eds from the Wall Street Journal and especially from National Review.

          • Vagabond661

            I WAS TALKING ABOUT POLITICIANS NUMB NUTZ!

          • Brucehenry

            You didn’t say “politicians” you said “the government.”

            And if you think “politicians” have received all or most of the wealth accumulated during the period 1980-2007 you are ummmm….. mistaken.

            Politicians are the puppets of those who HAVE accumulated that wealth. And those people are NOT regular folks.

          • Vagabond661

            Cut to the chase. Socialism or capitalism? Governments thrive in socialism. Private sector thrives in capitalism.

          • Brucehenry

            Simple-minded retort. Capitalism was more fair to the workers in the immediate post-WW2 period than it is today. It can be made more fair again.

          • Vagabond661

            Fair? How so?

            Would you agree fewer taxes and regulations on businesses are better for them to create jobs? Or does more taxes on them create jobs?

          • Brucehenry

            The share of wealth accumulated by the working class, relative to the share accumulated by the rich, was greater in the period 1945-1980 than it has been since.

            Ditto the productivity gains. The benefit of productivity gain went in a greater extent to the workers than to the owners back in the day, at least relative to today.

            Some regulations are necessary. I agree that some are unnecessary. In a democracy we elect representatives to decide which are which.

          • Vagabond661

            share of wealth=socialism

          • Vagabond661

            Would you agree fewer taxes and regulations on businesses are better for them to create jobs? Or does more taxes on them create jobs?

          • fustian24

            Well, they used to.

            Obamacare is fixing that. It’s going to trash our healthcare along with it, but no sacrifice is too great when you have the wealthy to punish.

        • Luca Candela

          Rotfl. Do You know if Mickey Mouse contributed his point of view on this subject too?

      • ohio granny

        There is plenty of evidence if you want to see it. Only democrats and illiterates refuse to see it.

        • Luca Candela

          Bring me your plentiful evidence please.

          • Jwb10001

            You’re so smart convince us we’re wrong instead of all this one sentence drive by commenting. Nothing you’ve said here has had even the slight bit of substance.

          • Luca Candela

            No, you got me all wrong. I’m here to help you find your own way, socratic style. The right answer is inside you, it’s just drowning in all the shit you convinced yourself to be true while watching Fox News. It’s fixable, just takes time.

          • Walter_Cronanty

            In other words, you got nothing.

      • Jwb10001

        You mean like there is no evidence to support Krugman saying, the right wants only the rich to have political rights?

      • Mjolnir
  • GarandFan

    Little Pauly is just another of the effete East Coast Intelligentsia – aka a limousine liberal. You take away all the tax shelters and expose his income to taxes, he’d freak out. You tell people they don’t NEED to live in million dollar homes and that the government is going to seize them, Pauly would change his tune real fast. Just like ‘ol Warren Buffet. After telling people he should be paying more in taxes; folks just said ‘Shut up and write a check!” Now Buffet says “I won’t pay a dime more in taxes than necessary!”

    • Luca Candela

      Even if, I would be happy to implement hit recipe. He would maybe complain, but we would have a better economy and a more just society, just like we had in the immediate post world war 2.

  • Sky__Captain

    Typical progressive – “Soak the rich. except for the ones in charge (like myself).”

    • Vagabond661

      They just don’t pay taxes until they are caught.

  • ohio granny

    How about starting with the rich TV anchors and reporters? Next get the democrat Hollywood types, then on to the rich democrat politicians like Feinstein and Bloomberg, on to democrat supporters like Gates and Buffett. Maybe then I will be willing to listen to idiots like Krugman spouting about soaking the rich. I know, they mean only rich republicans. A person can dream can’t they?

    • Brucehenry

      Apparently you didn’t watch the interview. I bet you’ve never read a word Krugman has written unless it was cherry-picked by some “conservative” who wanted to debunk it.

  • Joe_Miller

    He’s not really in favor of soaking the rich. He’s in favor of taxing high income earners. The rich don’t earn appreciable income and thus avoid any penalties while they promote this approach to taxation. Now just suggest a wealth tax and prepare to cover your ears when the screaming starts.

  • This is despicable. Why should I care, since I’m not rich? Because I want my children and grandchildren to have a shot at being rich, and I don’t want Krugman pulling the ladder up after him.

  • fustian24

    You know what the difference is between an economist and a regular person?

    A regular person knows he doesn’t understand the economy.

    An economy is such a non-linear, variable, hard to measure mess that it is virtually impossible to prove anything about it.

    The Laffer curve at least has to be true in the sense that both 0% and 100% tax rates yield zero, so in between there must be a maximum. But it doesn’t really tell you how to find that spot. And there may be more than one sweet spot.

    Nonetheless, most people understand that a given economy can only support so much government before it craters. At some point, it doesn’t matter how wonderful the programs are and how worthy are the beneficiaries. We just can’t afford it any more.

    It’s clear that too little government also brings its own set of problems. Getting the government sized right is a big deal.

    I can’t imagine anybody thinking that we have too LITTLE government right now. I won’t even try to prove it to you if you don’t agree, but it seems fairly obvious. in fact, I don’t hear anybody trying to make the case that we really need to grow government. I think everybody realizes that’s ridiculous. Instead the argument is that we cannot cut this program or that program without being heartless barbarians.

    Because of this, I think most of the economic arguing is about power and who should have it. Lefties know that much of their power and economic base is in the programs government sponsors, so even though it’s probably bad for the country, they’re still all in.

    It’s for the children.

    • Slātlantican

      The Laffer curve at least has to be true in the sense that both 0% and 100% tax rates yield zero, so in between there must be a maximum. But it doesn’t really tell you how to find that spot. And there may be more than one sweet spot.

      Well stated. Too many people who express opinions–both positive and negative–on the Laffer Curve fail to understand what you have written here. This idea that the crash of 2008 “disproves” the Laffer Curve is “laffable”, as is the idea that taxes cuts will always increase revenues.

      The fact is, we just don’t know. The lesson of Laffer was merely that whether revenues increase or decrease as a result of changes in tax rates depends where on this curve we were when the rates were changed. And what follows from that is that we should mind carefully what follows rate changes.

  • Paul Hooson

    Absolutely the wrong path. Cutting all taxes, including that on business, eliminating inventory or investment taxes would help to build our economy.

    • Vagabond661

      As anyone who runs a business knows, right?