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The rise and rise of American exceptionalism.

The U.S. was supposed to become a normal country again. The Bush administration's unsuccessful agenda to extend American supremacy and the repudiation of Bush in this election were supposed to prove that the United States must take its place as just one country among many. Yet the election of Barack Obama has had the reverse effect. Suddenly, the United States has prestige that matches its power and wealth, and this prestige no other country can touch. People around the world beg the United States to "exercise leadership" and solve the world's problems (but with "humility," please!). See here and here, among a thousand similar articles.

There are two versions of American exceptionalism. American-American exceptionalism is "we're richer because we're better." European-American exceptionalism is "you're better because you're richer." Both sides agree on exceptionalism, and just see different causes and implications. The Europeans expect us, on account of our wealth, to live up to (their) ideals, while we think that our wealth ought to prove to them that our ideals are better than theirs. No one of any importance seems to think that the United States is a normal country. Oh, what confusion lies ahead!

Update:

See also Ken Anderson's post here.

TRE:
Corollary to OK's post detailing how positions are required to switch.
11.6.2008 1:12pm
Lily (mail):
We're richer because we work hard; we are very productive. I wonder how long this will last when the really productive people realized that their income is now for 'spreading around'. Frankly, I am starting to feel like a sucker. Everybody seems to have their hands out these days - and I'm supposed to pay for it all. And I'm critisized for being 'selfish' for not wanting to pay for everything. It depresses me and makes me want to sit down.

The US Government now thinks I exist to serve their purpose. They think they have a better claim to my income than do I. Makes me sick. No bonus for me this year (economy and all), but I told my boss that 2009 might be a good year to earn less. Told my husband not to work too hard either (he'd a consultant), but maybe just spend more time with us. No need to make extra money if most will be confiscated. Can't build wealth in a confiscatory climate.
11.6.2008 1:19pm
Lily (mail):
And sorry for the typo's. Just too depressed to care.
11.6.2008 1:20pm
Crust (mail):
[W]e think that our wealth ought to prove to them that our ideals are better than theirs

Huh? Luxembourg and Norway (as well as Qatar, Brunei and Singapore) have a higher GDP per capita than the US (from Wikipedia's list of "richest countries"). Does that prove that they have better ideals than ours? Does anyone really think that way? Iceland is currently seeing a massive contraction in GDP. Does that prove that their ideals are deteriorating?
11.6.2008 1:20pm
Ken Arromdee:
I'm skeptical.

If you assume that Europeans don't like America for reasons that are mostly related to America being more powerful and richer, and if "you don't live up to your ideals" is just an excuse, I'd expect Obama not to raise America's prestige at all. Since it's an excuse, they'd just find some other reason to look down on America, and nothing America can do (short of becoming poorer and less powerful, which Obama could help with) will affect that.
11.6.2008 1:23pm
wfjag:

Until George W. Bush, no American president, not even Franklin Roosevelt or Woodrow Wilson actually risked his presidency on the premise that [Thomas] Jefferson might be right. But this gambler from Texas has bet his place in history on the proposition, as he stated in a speech in March, that decades of American presidents' ''excusing and accommodating tyranny, in the pursuit of stability'' in the Middle East inflamed the hatred of the fanatics who piloted the planes into the twin towers on Sept. 11.

"Who Are Americans to Think That Freedom Is Theirs to Spread?" by Michael Ignatieff, NY Times Magazine (June 26, 2005).

American Exceptionalism seems to be like the weather. People want to talk about it, but no one really wants to do anything about it.
11.6.2008 1:31pm
dr:

We're richer because we work hard; we are very productive. I wonder how long this will last when the really productive people realized that their income is now for 'spreading around'. Frankly, I am starting to feel like a sucker.


hear hear. i remember in the '90s when clinton the socialist was president of socialism and nobody did anything and the country went into the big old socialist toilet. why didn't we learn from that?
11.6.2008 1:35pm
Mark Rockwell (mail):
Now that I suspect that the tax rate on income I earn above $250,000 will raise by, perhaps, 3%, I no longer see a reason to work. Much less live.
11.6.2008 1:36pm
Crust (mail):
In case nominal GDP (rather than purchasing power GDP) is Eric's preferred measure of wealth, then America is proven to have the twelfth best ideals by his lights.
11.6.2008 1:38pm
mf24 (mail):
One Sarcastro is more than enough, people.
11.6.2008 1:41pm
akwhitacre (mail):
I've never heard anyone make the argument before that American Exceptionalism is tied to wealth. I've heard it tied to the proposition that it was the first country founded on an idea. I've heard it said that we're exceptional vs. Europeans because neither race, birth, money, nor religion determines your future. And I've heard exceptionalism defined simply as what Lincoln called "the last, best hope on earth".

But never with wealth.
11.6.2008 1:42pm
dr:

One Sarcastro is more than enough, people.


i got the sense that lily was being sincere. but maybe i've been punk'd!
11.6.2008 1:44pm
flyerhawk:
Exceptionalism is not the same as unilateralism.

The world wants America to lead, at least the Western world. The world does NOT want the United States to become a hegemony unwilling to even consider the well being of others.

The United States represents 25% of the world's GDP and well over 50% of the world's military might. Of course we are not a "normal" country.

The question is, are we any better than China? Will we be a leader of the world or simply biggest bully?
11.6.2008 1:46pm
wm13:
"Luxembourg and Norway (as well as Qatar, Brunei and Singapore) have a higher GDP per capita than the US (from Wikipedia's list of "richest countries")."

Luxembourg and Singapore are trading city-states, with per capita GDPs that compare unfavorably with that of Manhattan. Norway, Qatar and Brunei are petroleum exporters. Their GDPs may fall substantially next year; in any case, that isn't a viable model for other countries that don't happen to have lots of oil.

Generally, it makes more sense to evaluate GDP by using purchasing power parity conversions. This applies even when the topic is international power; the U.S., for instance, buys most of its military needs from Americans whom it pays in dollars. To the extent that pure financial power is relevant (e.g., if one were requesting contributions to a global stabilization fund), the forex numbers might be relevant, but not usually.
11.6.2008 1:53pm
Lily (mail):

i got the sense that lily was being sincere. but maybe i've been punk'd!


No. Lily is absolute sincere. I speak the truth here.
11.6.2008 1:54pm
guy in the veal calf office (mail) (www):
China thinks we're only half-more impressive.

Still, for some in China, the Obama glass remained only half-full. "Obama is half-white, half-black, so the progress in the U.S. is not that big," said Hu Jing, 25, a paralegal. "It will take dozens of years to elect a person who is 100 percent black."
11.6.2008 1:57pm
b:

Now that I suspect that the tax rate on income I earn above $250,000 will raise by, perhaps, 3%, I no longer see a reason to work. Much less live.



You know, i see this defense of Obama's tax plan a lot. But what it ignores is that it is both the top and the bottom of his plan that are objectionable. Sure, it's easy to say "an extra 3% on rich people is no big deal." But the fact that Obama's plan involves using the tax system as another piece of the welfare state by sending out more and more checks to people who don't pay taxes is troubling. As is the overall effect of removing more and more people from the tax rolls altogether.

So the 3% isn't really the point. It's that his view of the tax system as a way to buy votes and distribute wealth is wrong, and leads to nothing but more and more government involvement.
11.6.2008 1:57pm
Adam J:
Maybe it's just me, but I don't see any strong correlation between wealth and goodness. Nazi Germany managed create an industrial powerhouse &substantial wealth in a very short period of time... it had nothing to do with being "better". I mean come on... is it A) might makes right, B)right makes might, or C)none of the above.

I pick C
11.6.2008 1:58pm
JB:
sending out more and more checks to people who don't pay taxes

You mean the negative income tax advocated by Milton Friedman?

Damn University of Chicago socialists. No wonder they don't want to name an institute after him.
11.6.2008 2:02pm
Richard Aubrey (mail):
We were an exceptional country when the ordinary town looked like Dogpatch--late eighteenth century. Nothing to do with wealth.
But wealth is a byproduct.
11.6.2008 2:02pm
Lily (mail):
Mark Rockwell, show me your tax returns before your criticize me. I may very well pay more in taxes than you make.

And its not the 3% increase. Its the overall tax burden -which includes Federal Income Tax, State Income Tax, Social Security (my spouse is self employed - so he pays the full amount - and which Obama says he will increase), Gas Taxes, Sales Taxes, Energy Taxes. It all adds up buddy. Of course, I'm just selfish, you know.

I recently heard Obama say he plans to increase the cost on energy (to address Global Warming, you know) - but will include a tax credit for lower income people to offset their increased energy costs. Guess who will pay for that! Me, of course. I have to pay my own increase, as well as the increases of other people too.

As I said above, makes me what to sit down and just enjoy life. Let someone else pay for a change. Hey, CHANGE. Now that's a change I can believe in.
11.6.2008 2:02pm
SeaDrive:
The USA is exceptional because important people in other countries say so, and therefore demand various things of us (for their own benefit). I'm thinking of calls for the US to get involved in Israeli/Palestinian negotiations because....damn, I don't have the tiniest idea why. The US is not going to contribute much to any "solution," but apparently because the US is exceptional, it's important for us to contribute to the process of negotiating the solution.
11.6.2008 2:04pm
darelf:
Leadership doesn't work without something to back it up. Empty words will get you nowhere really fast.
11.6.2008 2:05pm
Lily (mail):
Oops, I forgot Real Estate Taxes. It just all adds up.

But, I'm just selfish to object to being plucked like a chicken.
11.6.2008 2:07pm
Lily (mail):

You mean the negative income tax advocated by Milton Friedman?


Friedman advocated a negative income tax to incent peope to work - to avoid the strange situation where they received more from welfare than they would earn if they went to work - To incent them to at least pull part of their own weight. He did not advocate the resistibution of income to make life more 'fair'. Good Grief.
11.6.2008 2:10pm
Sarcastro (www):
I may pay marginally higher taxes soon, so I'm going to peremptorily quit my job and sulk!

That'll show this "democratically elected" government that I've decided hates me and thinks it owns me! So what if no one has ever said that out-loud, I know it's true somehow!

Policy proposals that I disagree with make me rage with reasonableness!
11.6.2008 2:13pm
A. Zarkov (mail):
"Yet the election of Barack Obama has had the reverse effect. Suddenly, the United States has prestige that matches its power and wealth,..."

How this that? Do you mean the transitory cheering from the EU and Latin American communists? When the kissing stops national interests will again rein supreme as they always do. Unless of course Obama decides not to pursue our national interest.
11.6.2008 2:14pm
Lily (mail):

I may pay marginally higher taxes soon, so I'm going to peremptorily quit my job and sulk!


I already pay a lot in taxes. I am at the 'margin' with taxes. A little more, and I just don't bring home enough to make it worth my while. Ot to justify it to my family who has to make sacrifices in my two-income family. (you jackass)
11.6.2008 2:16pm
flyerhawk:
Friedman didn't support progressive taxation?
11.6.2008 2:18pm
hawkins:

I already pay a lot in taxes. I am at the 'margin' with taxes. A little more, and I just don't bring home enough to make it worth my while. Ot to justify it to my family who has to make sacrifices in my two-income family. (you jackass)


Stop talking about it then, and get busy being lazy.
11.6.2008 2:19pm
flyerhawk:
I already pay a lot in taxes. I am at the 'margin' with taxes. A little more, and I just don't bring home enough to make it worth my while. Ot to justify it to my family who has to make sacrifices in my two-income family. (you jackass)


Post of the day for unintended comedic value.
11.6.2008 2:20pm
Sarcastro (www):
Lilysounds just like those families in the Obama infomercial that are having a real hard time in life and need help from the government.

If it weren't for the Bush tax-cuts, I don't know what she would have done.

A real life-saver those were!
11.6.2008 2:22pm
Lily (mail):

Friedman didn't support progressive taxation?

No, go home and read "Free to Choose".
11.6.2008 2:23pm
Lily (mail):

Lilysounds just like those families in the Obama infomercial that are having a real hard time in life and need help from the government.

If it weren't for the Bush tax-cuts, I don't know what she would have done.

A real life-saver those were!


I guess you don't read well. I the one PAYING for everything.
11.6.2008 2:24pm
Houston Lawyer:
Clearly we should raise the taxes on those making $100,000 or less so they can feel a little pain.

My wife works, but makes less than what is withheld from my paycheck. This means that the effective tax rate on each dollar of her income is 42.2%, because we don't have a state income tax. We also pay a lot of money for child care, which is approximately 28% of her income. So she's already working for 30 cents on the dollar.

If our tax situation gets worse, she could easily make a life-style choice and quit working. It would cost the government more than it would cost us.
11.6.2008 2:28pm
Gramarye:
I think that the flash of the moment is blinding a lot of people across the globe right now. Give it time. Right now, people are still taking in the fact that Obama is the first African-American president. Soon enough, they'll see him as just another American president. Then we'll basically be back to where we were before.
11.6.2008 2:28pm
Gramarye:
Lily:

If you're unwilling to work harder to make more money, then don't work harder and be happy with what you currently make. Don't come onto the Internet trolling for sympathy from people who may make a quarter of what you do.

Eastern Europe has some states that have enacted flat taxes and I'm sure would have ample room for new residents. That's assuming you're comfortable living outside the hard girdle of American might, of course, but you ought to be all for that--after all, that military might is supported by government theft from your hard-earned paycheck.
11.6.2008 2:32pm
MarkField (mail):
Lily, instead of focusing on how much you pay, it might be better to focus on what you receive in return. I, for example, certainly don't mind paying taxes for trash pickup for the poor, because it's not very attractive for me to live in a city with trash in the streets. I benefit when my whole society is better off.
11.6.2008 2:33pm
PC:
I guess you don't read well. I the one PAYING for everything.

You must have hated living under that socialist Reagan.
11.6.2008 2:34pm
Sarcastro (www):
[Lily. First, I don't mean to offend you. I do this online persona for fun and I try to stay light and witty but sometimes I screw up and offend someone. In this time of raw emotions I should have been more careful with my words and I apologize.

Your comments seem a bit over the top though. Is it the practicalities or the principle you're so unhappy about? Or is it both?

You said you're on the margin now of your job being worth it in your two-income home. Then you say you're rich enough to be paying everything (everything being 39% of your income at worst case).

A society that does not perfectly follow the dictates of Milton Friedman is not necessarily going to crumble.]
11.6.2008 2:37pm
ys:

guy in the veal calf office (mail) (www):
China thinks we're only half-more impressive.


Still, for some in China, the Obama glass remained only half-full. "Obama is half-white, half-black, so the progress in the U.S. is not that big," said Hu Jing, 25, a paralegal. "It will take dozens of years to elect a person who is 100 percent black."

Math education in China is obviously very advanced. Not to mention an excellent legal system with such a high caliber of half-legals (I mean paralegals). In just a few dozens of years they may become 100 percent legal.
11.6.2008 2:38pm
Cactus Jack:

China thinks we're only half-more impressive.

Still, for some in China, the Obama glass remained only half-full. "Obama is half-white, half-black, so the progress in the U.S. is not that big," said Hu Jing, 25, a paralegal. "It will take dozens of years to elect a person who is 100 percent black."

I bet it will take longer than that for China to have a black premier.
11.6.2008 2:40pm
Sarcastro (www):
Houston Lawyer buried the lead. When one stays home, all child-care costs disappear!

It's sad all these people are going to be forced to stop working. Though I find it an interesting coincidence how many of them are anti-taxes to begin with.
11.6.2008 2:45pm
Sarcastro (www):
heh. Wait till China finds out it's only Obama's outer surface that looks black, and that inside he's all red!

Instant ally?
11.6.2008 2:46pm
Lily (mail):
My comments may seem over the top to you. However, taxes hit my 2nd income very hard. For the past year, I have been thinking that I am not bringing home enough after tax income to justify continuing to ask my family to make the sacrifice of a having working mother. With higher taxes, even marginally so, I may very well be pushed out of the job market - sent home if you will. A lot of women want to stay home. I do not.

This make me unhappy. And more so as I am lectured about being 'selfish'. And ridiculed.

Actions have real consequences for real people. Higher taxes cause people 'at the margin' to make different choices. Sometimes choices that are different than they want to make.

Laugh if you want. And lecture about how 3% isn't that much. But is pushes me over the top, and makes it more difficult for me to pursue happiness the way I define it.
11.6.2008 2:58pm
Houston Lawyer:
Child-care costs don't go away, but day-care costs do. I guess though we could continue to send checks to Creme-de-la-Creme to keep those people employed.

I certainly don't cut checks to the wife for feeding the baby.
11.6.2008 2:58pm
A.C.:
When Obama is just another American president, that will be progress. It was progress when people stopped noticing that Powell and Rice were black and just thought of them as regular secretaries of state. Frankly, I'm not sure why anyone would be surprised by a black president, given that there have been other black US officials in high positions already.

Maybe it's the difference in ideology. Which surprises me, because nobody seems to know what that ideology is yet. I have no idea what this guy is going to do.
11.6.2008 3:00pm
Sarcastro (www):
[Houston Lawyer but you do pay for the groceries, yes?

My point was only that you wouldn't be saving all those costs by having your wife stay home.]
11.6.2008 3:03pm
Azatoth:
Lily's family makes sacrifices so they can have a high income with both parents working. (I assume there are children involved)

My family makes sacrifices in that we only have one income (and that being only about $50k) so that we can devote ourselves to our family.

It probably makes me unAmerican, but I think the rewards of having a close-knit family where I spend scads of time with my kids because I never work weekends and I am home before 5pm most days, more than outweigh the sacrifice of not having a McMansion and a couple of BMWs.
11.6.2008 3:10pm
Sarcastro (www):
Azatoth's path to happiness sounds objectively better than Lily's to me!
11.6.2008 3:12pm
flyerhawk:
Lily,

You are ridiculed because in post you say that you pay more in taxes than others earn in income and then in another post you talk about how a slight increase in marginal rates will force you to quit.

Unless your AGI is well above 250K, a 3% increase in the top marginal rate will have a negligible effect on your take home pay.
11.6.2008 3:13pm
Lily:
My household income is above $250K. Its my spouse who makes most of the money. My decidedly middle class income, however, is taxes as if I make over $250,000. That is what drives spouses out of the job market.

And I said I MAY pay more than you make. I said this becuase it occurs to me that its possible that I am being lectured about selfishness by people who are possibly paying little to no taxes. I don't know your situation. You give no information.
11.6.2008 3:18pm
Houston Lawyer:
Sarcastro

The costs I cited will all go away if my wife quits work. Sure, I will still buy groceries and pay the mortgage. However, the taxes on my wife's income go away as does the day care paid to third parties. As I noted above, those two items consume 70% of my wife's salary anyway.

I don't think my situation is at all unusual. As Aztoth notes above, there are costs to a two-income family that many people choose to avoid. If taxes are raised too high, many more of us may choose Aztoth's path.
11.6.2008 3:19pm
Lily:

My family makes sacrifices in that we only have one income (and that being only about $50k) so that we can devote ourselves to our family.

That is your choice, and you are free to make it. I wish you well. But don't ask me to kick in more of the money I sacrifice to make to make your choice easier.
11.6.2008 3:20pm
flyerhawk:
Lily,

Why don't you file separately?
11.6.2008 3:23pm
Azatoth:
I have not asked you to "make [my] choice easier."

I always wonder about these people who hate all things tax - and how if the rate goes up to what it was during the '90s (when everyone was getting rich) - they will be forced to quit work on go on the dole.

Perhaps it would be a good system wherein people could opt out of taxes, and in return the government could opt out of services for those people.

They could keep all of their money, but could not use the roads or the sewers or the police department or fire department. No recourse to the courts if someone cheats them. (because those evil judges are paid by tax dollars)
11.6.2008 3:25pm
SeaDrive:

My wife works, but makes less than what is withheld from my paycheck. This means that the effective tax rate on each dollar of her income is 42.2%, because we don't have a state income tax. We also pay a lot of money for child care, which is approximately 28% of her income. So she's already working for 30 cents on the dollar.


Are you blaming the tax code for the cost of child care? I do believe your anger is effecting your logic.

It's been true for a long time and at most levels of income that couples with young children are have only a little more income (post tax, post expenses related to employment including child care) than they would have if the lower paid person stayed home and took care of the children. That's just the way it is, unless you have some special circumstance such as free child care, e.g. Grandma.
11.6.2008 3:27pm
Mhoram:
Grandma rocks!!!
11.6.2008 3:28pm
MarkField (mail):

I bet it will take longer than that for China to have a black premier.


Well, they have had a Mongolian one.
11.6.2008 3:30pm
autolykos:

[Houston Lawyer but you do pay for the groceries, yes?

My point was only that you wouldn't be saving all those costs by having your wife stay home.]


You clearly haven't priced day cares lately. The cost of food or other incidentals for a toddler may be priced into day care, but they're an extremely small part of that cost.
11.6.2008 3:33pm
Joe Gator (mail):
Houston Lawyer buried the lead. When one stays home, all child-care costs disappear!

Just wait until they try to start taxing the imputed income of having a parent stay at home.
11.6.2008 3:33pm
Lily:

I have not asked you to "make [my] choice easier."

Who did you vote for. Surely at $50K income, you must know that you will be receiving 'tax credits' from the government in an effort to 'lower your tax rate'.

Who do you think will be paying for these tax credits?
11.6.2008 3:35pm
Houston Lawyer:
Azatoth

Count me in on being able to opt out of paying taxes that go strictly to transferring my income to other parties. That includes social security, medicare and a majority of my income taxes. All of the services you mention are paid for out of state taxes, which aren't even under discussion here.

People who pay little in taxes have no idea of the negative incentives that high marginal rates produce.
11.6.2008 3:36pm
Lily:
Lily,

Why don't you file separately?

Doesn't help. Checked it our already. I also threated to divorce my husband. I told him 'living in sin' sounds pretty great, doesn't it?
11.6.2008 3:37pm
Adam J:
Lily- You appear to be referring to the marriage tax penalty... I think you can find plenty of bipartisan support that the penalty is ridiculous... you should not be taxed at your spouses tax rate- it disincentives either marriage or both spouses working. I don't believe this generally considered liberal/conservative issue- there's plenty of asses on both sides who thinks its okay either because its more money for pork or because they want wives staying at home.
11.6.2008 3:38pm
Sarcastro (www):

People who pay little in taxes have no idea of the negative incentives that high marginal rates produce.


[I'd be interested to see a study about that, because I've heard anecdotal evidence both ways about the negative incentive of higher taxes.]
11.6.2008 3:44pm
Adam J:
Houston Lawyer- Sure they do... the negative incentive is them voting Republican
11.6.2008 3:54pm
Lily:
Eric Posner: I owe you an appology. It appears that I hijacked the comments thread on your thoughful post.

I am Sorry.
11.6.2008 3:59pm
Lily:
It also appears that I need to stop being so lazy and spell check my comments.
11.6.2008 4:00pm
Hoosier:
There is another tradition of American exceptionalism--the Matthew-via-Winthrop version that places our "Citie" upon a "Hill.'

We are exceptional as an example, as a beacon for others to emulate*. But not as an exporter of what we are. Bob Taft was cast in this mold. Andrew Bacevich may be in a similar camp.

I take a more "conservative internationalist" stance. So I can't call for the level of retrenchment that Bacevich and co. are calling for. But it is important to know that this conception of American exceptionalism is out there too, and is as old as America.



*Note to Islamists: "Emulate." Not "immolate."
11.6.2008 4:20pm
Hoosier:
Lily
And sorry for the typo's. Just too depressed to care.

Welcome to my world.
11.6.2008 4:21pm
Perseus (mail):
I've never heard anyone make the argument before that American Exceptionalism is tied to wealth.

I haven't either, or at least I haven't heard anyone reduce it merely to wealth.
11.6.2008 4:23pm
Hoosier:
Lily

I am part of the academic proletariat, so my taxes are supposedly going to be cut under the new Dispensation.

Of course the people whose taxes are raised are going to charge me more for the stuff I need. So I'm not going to come out ahead on this tax-hike thing. But on the other hand . . .

Nope. Sorry. Can't think of anything.
11.6.2008 4:26pm
Hoosier:
Perseus

The exceptionalism-wealth connection is usually made the other way 'round: Because of our virtues, we are productive. Not that we are virtuous because we are productive.

It's in the Federalist that way. So I'm going to keep thinking of it thus.
11.6.2008 4:29pm
wfjag:

Sarcastro:
Houston Lawyer buried the lead. When one stays home, all child-care costs disappear!

Thank you Sarcastro. Now all is clear. The true object and effect of Pres. Obama's tax proposals is to convince all working mothers to quit their jobs and become stay-at-home Moms, like their mothers were. Soon the U.S. will return to an "Ozzie &Harriet" like 1950's blissful state. All of our problems will disappear and the world will love us, again. I'll bet that Pres. Obama will even convince Michelle to be a stay-at-home Mom. This is certainly change we can all believe in.

But, will we have to give up our flat-screened HD TVs and go back to Black &White TVs?
11.6.2008 4:30pm
Elliot123 (mail):
"My family makes sacrifices in that we only have one income (and that being only about $50k) so that we can devote ourselves to our family."

That's great. But do you expect me to kick in my money so you can get a check from the government to make your devotion easier?
11.6.2008 4:34pm
MarkField (mail):

There is another tradition of American exceptionalism--the Matthew-via-Winthrop version that places our "Citie" upon a "Hill.'


That's always the way I understood it as well.
11.6.2008 4:39pm
flyerhawk:
Hoosier,

How do you consider Andrew Bacevich's views to be notably different than conservative internationalism, at least defined prior to neoconservatism taking hold? Or do you consider yourself a neoconservative internationalist?
11.6.2008 4:41pm
Nunzio:
I'd never heard of american exceptionalism tied to wealth either. I'd always thought of it as a forward-looking, positive outlook, which, although I didn't vote for him, Obama's election embodies.

Personally, I'd like to see a reduced role for America in the world as far as diplomatically and militarily. I'm not an isolationist, but I thought that Gulf War I, trying to mediate talks in Northern Ireland and the Middle East, Somalia, Bosnia, and the Iraq War were not useful.

I do think W.'s increase in foreign aid to African countries has been a very good idea and are the highlight of American Exceptionalism during the last 20 years.
11.6.2008 4:58pm
Ed Scott (mail):
Good grief Lily, why do you even think of reneging on your obligation to be productive and to spread your wealth? How can you, a hard working American, not appreciate the equality of financial outcome? Dare I say, you do sound a bit selfish? Your occupation is more secure because of the idle masses who choose not to succeed and therefore not be competitive in your job market. American culture is based on equality of outcome. Since you are getting a large share of the pie, you are depriving others of their share of the pie. There is only so much pie to go around, so be altruistic and distribute your share among the idle masses. The only way to feel better would be to distribute other people's pie and keep your own.

You are apparently an "old school" American, but you will come around to the new American way I am sure. You will soon see the light - not in The Ghost Whisperer sense - and embrace hope and change with enthusiasm.

An anticipatory thank you for spreading your wealth, Lily, and for your participation in the coming new communal America. :-)
11.6.2008 5:09pm
Hoosier:
flyerhawk

How do I explain what I mean without going on and on without end?

OK. Let me try. Two points:

1) The role of power and principle in foreign policy
2) The question of republicanism and empire.

(1) The right has "realists". Kissinger, say. They concern themselves with power relationships.

Then there are neo-cons. Very vague term, but generally Wilsonians who think that the American Way is universally applicable, and that America is safer when more nations share our values. Many, but not all, are thus willing to use military force to "do the right thing." Even when it means trying to change other cultures.

The "paleo-cons" like Bacevich, as well as others at The American Conservative, think that the US government has obligations to the US people alone. I don't think that they all come from the same philosophical position. But for practical purposes, they think the US should keep its nose out of areas where our vital interests are not involved.

Conservative internationalists have a basically realist worldview. But they (we) are also aware of the peculiar nature of the US, and that who we are cannot be ignored when Washington shapes foreign policy. (Here I could get into all sorts of problems that the other three schools of thought face when the American people compare US foreign policies with their values. I won't enumerate.)

Thus, we tend to consider vital interests first. Like Hamilton, we tend to see economic prosperity as a vital tool, without which we can't build the resources to defend our interests and institutions. (Thing Ike and the "Great Equation.") But we also know that Americans won't support a policy in the long-term if it doesn't try to do "the right thing" wehn the opportunity exists, and is not too costly.


Our partial pedigree: C. F. Adams, E. Root, H. Stimson, C. E. Hughes, G. Marshall, D. Acheson, Ike, Ford, (later-)Scowcroft, Bush I, Lugar.
11.6.2008 5:24pm
Hoosier:
(2) Coming later, if there's any interest. Gotta go teach a class. (NOT about conservative internationalism.)
11.6.2008 5:25pm
guy in the veal calf office (mail) (www):
Houston Lawyer's situation is not unique. California has 9% state tax (deduction lost to AMT) on top of the federal rate so if 2 earner couple pays Nanny/House Cleaner $50,000, they have to earn ~89k (50/44.85%) to pay them on an after-tax basis; that same $50,000 gets more expensive with Obama’s taxes increases, even as the earners get poorer. (Plus, they're likely paying the employee's social security, too, and a commuter vehicle and associated non-deductible expenses of working.)

A big tax increase is cause to consider whether a lesser paid spouse (~$100k) should continue slogging off to work for that measly $11,000 salary. Easier to fire the nanny, fire the house keeper, fire the pool guy, fire the gardener, stop buying car washes, spend less money, and opt for more expense-free leisure time with the kids.

This isn't to elicit sympathy, but to explain how you multiply this by 200,000 and the economy and unemployment gets worse and tax receipts decline.


[Personally, I will be bummed if he removes the cap on social security because that's a holiday in my life when I get that check. Its like an extra couple hundred bucks every pay period.]
11.6.2008 5:43pm
MarkField (mail):

so if 2 earner couple pays Nanny/House Cleaner $50,000


I live in LA and have hired nanny/house cleaners, and never once have I paid one $50k. That would be $25/hr, which is way over any reasonable standard here.
11.6.2008 6:15pm
David Larsomn (mail):
He who does not work
Neither shall he eat


Ah, the good old days....

Now its:

I am
Therefore I'm owed
11.6.2008 6:34pm
Thief (mail) (www):

Will we be a leader of the world or simply biggest bully?


What, exactly, is the distinction?
11.6.2008 7:14pm
bobby b (mail):
" . . .and the country went into the big old socialist toilet." Ick. No one would ever clean it, and, while we'd be daydreaming about sharing the really cool fur-lined swirl-a-potty that our kids' orthodontist was showing off in Home Beautiful last month, we forget that the guy living in the van has visions of using OUR toilet. Or sink. Or . . . whatever. According to his needs, I guess.

"I don't see any strong correlation between wealth and goodness." I think it would be very good to have wealth.

" . . .it's not very attractive for me to live in a city with trash in the streets." I think it's fairly universally accepted that we no longer call them "trash. Still, though, we've not yet made the leap to giving them veto powers simply based on your looks, so don't listen to them. They're your streets, too.
- - -

I always love the "what's an extra 3% from the rich?" sentiment, as if the speaker's lack of ability to perceive the answer entitles them to even 1% of that other person's money. How about this: In high school, while bunches were toking away in the parking lot, I was doing homework, finishing up labs, working 40 hours per week and saving most of the income for college, reading a ton, and getting A's. All of that hard work and denied pleasure was the coin that then bought for me the opportunity to work even harder for four more years in college, while still employed, pursuing a knowledge-based degree (and not one of the whimsy-based degrees like sociology, art history, womyn's studies, or (gag) journalism.)

Having done well in a good college, I took that credential (and its resultant huge debt) to another place, where it got me in the door for law school. Having spent the requisiste amount of time there working my buns off and getting good grades and learning the stuff, I took and passed the guild's membership tests. They let me in.

The cumulative burden of all of that "no, I can't do bong hits and play vids with you tonight" self-denial, along with all of the hard effort of becoming educated and of some use to other people constituted yet another credential, this time one that allowed me into a workplace that granted to me the complete freedom to choose for myself how many hours over and above 75 per week I wanted to work. And for this effort - and also, of course, for the ability to perform well as an attorney in a law-based society (an ability only made possible by the preceding twelve years of discipline) - for this effort expended six days per week (except on the seven-day workweeks), I get paid very, very nicely.

So, what's that 3% mean to me? It's 3% more of my money - MY money - that the slackers and potheads and whiners are going to claim from me, just as if they have some right to do so beyond a thug's threat, and of course they're gonna steal it in a group, because then they can all do group hugs and convince themselves and each other that they're not really just a bunch of lazy-butt moochers, but actual contributers, that they're not just net drains on humanity, but actually make the world somehow better just with their presence. They're going to take that 3%, and add it to the other 40-some percent they already take away, and then they're gonna use some of it to buy ads telling the world what a cheap ass I am for not giving them the additional 10% they wanted.

(And, Mr. Posner, please don't select two quotes from the New York Times to prove to us the sentiment of the world.)
11.6.2008 7:16pm
wilky (mail):

Now that I suspect that the tax rate on income I earn above $250,000 will raise by, perhaps, 3%, I no longer see a reason to work. Much less live.


How about, as an American, we all have equal say in this country. One Vote. Why does someone have to pay a higher percentage for that privilege?
11.6.2008 7:25pm
guy in the veal calf office (mail) (www):
Mark

People differ.

But, you can change the payments, the salary, the tax rate, etc. in my example and the principle abides. The higher on the income scale, the fewer the number of families. The top 5% of those families pay most of the income tax in the country. Tax increases pick-off some of those people because the cost of taxes make leisure more attractive than work, and people get fired, economic activity is reduced, tax receipts from our bigger taxpayers decline and ripples emanate therefrom.

No one seriously disputes this effect- they seriously dispute the effect's size, though. The government must spend some money after all so we all accept taxes. I like security, roads and clean air myself, but not crony capitalist subsidies, bail-outs of crappy car &financial companies, rich salaries to public sector employees (especially those who blog) or indiscriminate hand-outs to non-taxpayers (indiscriminate means without reference to whether they're unlucky or just shiftless, risk-avoiders and bad decision makers.
11.6.2008 7:27pm
rfg:
Lily and all of those like her- I get a feeling that money is a primary motivator in your lives.

I hate to say this, but I just don't get it. There is so much more out there that simply getting that last dollar! If you feel that you must get out of the house, then get- go volunteer at a school, read to the blind, etc. No money there, but perhaps other rewards.

I'm afraid that money is not a big deal for me (possibly because we never had much until the last 4-5 years- we were never "poor", but vacations in Cancun were out). Now that we do have some, I find it still does not make a major difference (and vacations in Cancun are still out- I fly too much to even think about getting on a plane for fun!). Sure, it makes life nicer, but it's not a must.

Besides, who do you think is going to pay for the wall St. bailout and other fun things the recent "consrvative" government left behind? The ones that make <$50K/year? Not enough blood in that turnip!
11.6.2008 7:43pm
rfg:
And one more thing- I went into my chosen occupation (electrical engineering) because I loved it, not because I expected to get rich. I wonder why the folks like Lily went into their field- for love of the work or love of the pay?
11.6.2008 7:50pm
SeanLA (mail):
why do you link to the NY times as if it validates anything? The site you link to has been proven to be misleading, ommissive and propagandistic. It valadates nothing.
11.6.2008 8:04pm
Lily:
rfg: You're kind of a self rightous guy, aren't ya?

My motivation is irrelavant. Its my time, my effot, my money.

Aparently, my fellow citizens feel entitled to take as much of my money as they please, and lecture me while they do it. If this is the case, am I really free? If I don't pay - I go to jail.

I object. Not just becuase I will be poorer for it. But also because our nation will be poorer for it too. We will all have less - and that includes you - so its a good thing you don't care about money.
11.6.2008 8:27pm
Bod:
Furthermore, rfg, you exercided free will in deciding the career path you followed, and your lifestyle.

What right do you have to dictate that Lily, or I, cannot exercise freewill and change our lifestyles to avoid what we consider to be unjust?
11.6.2008 8:36pm
Mark Rockwell (mail):
I think the point is that we can all accept that taxing the rich will have an incredibly complex but probably dampening effect on economic growth. (The complexity comes from what is taxed, how, and how the tax revenue is spent.) But even assuming slower economic growth, the posited trade-off is potentially all sorts of other great stuff that will make life better in our country--not just for those who directly benefit from, say, health care, but for everyone else who indirectly benefits from a healthier population, less desperation, a more productive workforce.

Anecdotally, it seems like countries with larger social welfare programs have lower crime rates and better quality of life, as measured by standards like average life-span, education, infant mortality and other things beside TVs and SUVs. (Which is not to say that the later are of no importance.) The important policy question is then: when do the negatives and costs of taxing the wealthy (and, of course, there are many costs) outweigh the benefits to be gained by creating a more firmly knit safety net with which to pull up all of society. I'm not debating that there is a line, only where to draw it. Nor, for the record, am I suggesting that hard work and dedication do not deserve what rewards they earn. Just keep in mind that the rewards that are available are part of the system itself--that is: I'm not gonna weep for your natural rights. So when we vote for someone who will raise our taxes, we do so on the expectation that the resulting social spending will more than offset (in not directly economic ways) the loss of economic growth.
11.6.2008 8:50pm
bobby b (mail):
"I hate to say this, but I just don't get it. There is so much more out there that simply getting that last dollar!"
- - -

This is proffered in support of "so give it to me instead"?

I have a weaker justification for keeping every last one of my dollars than dropouts have for appropriating them?

C'mon, I always figured the story of the parent-killer throwing himself on the mercy of the court because he was an orphan was apocryphal.

(If there's any question, I absolutely love what I do for a living, went into it partially for the money and partially not, and consider retorts premised on my somehow improperly overvaluing money to be a bit dishonorable when the thesis is that y'all should stop trying so hard to claim it's really yours.)
11.6.2008 8:55pm
bobby b (mail):
"But even assuming slower economic growth, the posited trade-off is potentially all sorts of other great stuff that will make life better in our country--not just for those who directly benefit from, say, health care, but for everyone else who indirectly benefits from a healthier population, less desperation, a more productive workforce"
- - -

When you take things from Joe, and use them to buy peace from Frank, and that peace inures to the benefit of one million people plus Joe, I think that "tradeoff" is being used to politely refer to theft. To imply that Joe has engaged in some trade in which he exchanged something he had for something he wanted in a fair transaction really does bastardize market theory.
11.6.2008 9:01pm
MarkField (mail):

The government must spend some money after all so we all accept taxes. I like security, roads and clean air myself, but not crony capitalist subsidies, bail-outs of crappy car &financial companies, rich salaries to public sector employees (especially those who blog) or indiscriminate hand-outs to non-taxpayers (indiscriminate means without reference to whether they're unlucky or just shiftless, risk-avoiders and bad decision makers.


I agree with all of this (with a few caveats). In principle, I'm not sure anybody would disagree. Where we do disagree is in making the choices Mark Rockwell suggests. I personally think we spend far too much on the military, but others obviously disagree. I think we spend too little on education, but again others obviously disagree. When we talk about how much in taxes people "should" be paying, we each have our own internal view of what general level of (appropriate) governmental spending we'd like to see.
11.6.2008 9:03pm
Lily:
Mark assumes that if we just take care of everybody, then we'll live in such a great world - Just one of his points - lower crime in countries with more welfare - check this out - US Crime Rate well below European socilistic counties (which the table copied better) (BYW - its a rather well know fact that many developed countries misrepresent their infant mortality stats)

Table 4: Total Recorded Crimes, Ranked by Rate Per 100,000 Inhabitants


Rank Nation Crime Rate

1
Iceland
21,211. 97

2
Sweden
13,836. 67

3
United Kingdom
11,014. 38

4
Finland
10,005. 65

5
Belgium
9,421. 74

6
Denmark
9,137. 07

7
Netherlands
8,813. 57

8
Canada
8,025. 37

9
Germany
7,888. 23

10
Austria
6,863. 95

11
South Africa
5,918. 73

12
Luxembourg
5,866. 22

13
Malta
4,287. 91

14
Switzerland
4,219. 90

15
Slovenia
4,159. 73

16
Hungary
4,141. 96

17
United States
4,118. 76

18
Uruguay
3,987. 21

19
Italy
3,868. 17

20
Chile
3,810. 36

21
Argentina
3,674. 70

22
Poland
3,672. 89

23
Czech Republic
3,650. 04

24
Lithuania
2,670. 68
11.6.2008 9:05pm
autolykos:

I always love the "what's an extra 3% from the rich?" sentiment, as if the speaker's lack of ability to perceive the answer entitles them to even 1% of that other person's money. How about this: In high school, while bunches were toking away in the parking lot, I was doing homework, finishing up labs, working 40 hours per week and saving most of the income for college, reading a ton, and getting A's. All of that hard work and denied pleasure was the coin that then bought for me the opportunity to work even harder for four more years in college, while still employed, pursuing a knowledge-based degree (and not one of the whimsy-based degrees like sociology, art history, womyn's studies, or (gag) journalism.)

Having done well in a good college, I took that credential (and its resultant huge debt) to another place, where it got me in the door for law school. Having spent the requisiste amount of time there working my buns off and getting good grades and learning the stuff, I took and passed the guild's membership tests. They let me in.

The cumulative burden of all of that "no, I can't do bong hits and play vids with you tonight" self-denial, along with all of the hard effort of becoming educated and of some use to other people constituted yet another credential, this time one that allowed me into a workplace that granted to me the complete freedom to choose for myself how many hours over and above 75 per week I wanted to work. And for this effort - and also, of course, for the ability to perform well as an attorney in a law-based society (an ability only made possible by the preceding twelve years of discipline) - for this effort expended six days per week (except on the seven-day workweeks), I get paid very, very nicely.

So, what's that 3% mean to me? It's 3% more of my money - MY money - that the slackers and potheads and whiners are going to claim from me, just as if they have some right to do so beyond a thug's threat, and of course they're gonna steal it in a group, because then they can all do group hugs and convince themselves and each other that they're not really just a bunch of lazy-butt moochers, but actual contributers, that they're not just net drains on humanity, but actually make the world somehow better just with their presence. They're going to take that 3%, and add it to the other 40-some percent they already take away, and then they're gonna use some of it to buy ads telling the world what a cheap ass I am for not giving them the additional 10% they wanted.


*fist bump*
11.6.2008 9:09pm
Agoraphobic Plumber (mail):
"I'm skeptical.

If you assume that Europeans don't like America for reasons that are mostly related to America being more powerful and richer, and if "you don't live up to your ideals" is just an excuse, I'd expect Obama not to raise America's prestige at all. Since it's an excuse, they'd just find some other reason to look down on America, and nothing America can do (short of becoming poorer and less powerful, which Obama could help with) will affect that."

There IS nothing America can do to affect Euros' opinion of us in the long term short of becoming poorer and less powerful. Do you believe that suddenly Europe (and the rest of the world) has found a lasting liking for us all of a sudden because we elected a black guy? Really? After centuries of hatred, or at the least disdain and ridicule?

Obama hasn't even begun his honeymoon yet. He's never had to make a difficult decision that's going to piss people off. EVER. Not in the senate, and not before. But that's all about to change.

We've elected a guy who has never had to make a decision beyond his own campaign to be our president. Sigh. I just don't understand this. I hope all the people that are seeing things I'm not are right and I'm just an ignorant hick, because otherwise bad things are going to happen that could probably have been prevented.
11.6.2008 9:13pm
Agoraphobic Plumber (mail):
"I think we spend too little on education, but again others obviously disagree."

Me, for one. Since the day I was writing for my state university's paper and in the course of doing an article on the bookstore's finances I discovered they had laid out $120,000 for stained-glass windows. At that time, it was equivalent to 5 4-year educations including dorm costs.

I was on a campus not long ago. Those people live better than anybody else in the society. The tenured professors have no obligation to teach unless they feel like it, cannot be fired and are entitled to full salaries basically for the rest of their lives plus one of the most generous benefits packages around, regardless of what they do or refuse to do.

On another note, I strongly question the role of the federal government in education, period. Is this not something that could be better dealt with by the states, or by the universities (and lower schools, for that matter) themselves? Why should we hand our money to the federal government so that they can turn around and give it to the state, so that they can turn around and give it to a university? Why all the rigamarole? So they can skim it?

Universities are clearly not charging enough for their service if they need subsidies in order to stay in business. They should be forced to either cut costs or raise prices and lose business. Period.

The waste involved in universities is staggering when you look at it closely. I had a catbird seat to learn about this kind of thing when I was in school, as I worked for campus security and got to see a lot more of the campus than a lot of students. The energy wasted at that university could have provided power for half the town.

No, I don't think lack of money is the problem with education.
11.6.2008 9:31pm
Steve J. (www):
America is exceptional among the developed nations in 2 respects:

1) We have more fundamentalist Christians who have false beliefs about biology and cosmology

2) We have a larger CEO/ruling class elite
11.6.2008 9:37pm
John S.:
I'm struggling with the math (aerospace engineer here, so I can't hang with the lawyers, but I can do numerical analysis) and raw numbers mean a lot more to mean than do percentages.

Say a single earner making $250,000 after deductions files married, jointly. They would pay $61,229 in taxes.

If a second income is added for, say, 50,000, an additional $16,500 in taxes would be added. A 3% increase on that rate would be result in $2,500 out of a total $300,000. It is suspect to me that that $2,500 out of $300,000 is truly a make or break decision point for working vs. not working, if working is truly a fulfilling choice.

If children are involved, the math does become more compelling. A quick google search leads me to assume a nominal $10,000/year in daycare costs. That means the real gain of one spouse working at $50,000 is $40,000 less the taxes. If the tax rate is a break point, seems to imply that $22,500 of after tax, after child care income is worth working for, while $20,500 is not. Again, it seems implausible that $2,500 is a true break point, when the $10,000 savings realizable by offsetting child care costs isn't a sufficient draw. With a combined income of $300,000, the real effect of $2,500 is negligible, a second order effect relative to typical investment fluctuations, and I can't see it being a rational driver in an economic sense.
11.6.2008 9:39pm
Steve J. (www):
i remember in the '90s when clinton the socialist was president of socialism and nobody did anything and the country went into the big old socialist toilet. why didn't we learn from that?

Under Clinton, there were over 21 million new private sector jobs created.
11.6.2008 9:48pm
Steve J. (www):
Can't build wealth in a confiscatory climate.


We are simply talking about restoring the Clinton tax rates.
11.6.2008 9:50pm
John S.:
On a tangent point: The vast majority of people living in the US in an area west of 100 degrees longitude (see all of California, Arizona, NM, etc.) could not be supported without large scale water projects, almost all of which were and are federally tax funded, for which users pay much less than the real cost of the water through a nationalized system of power generation (the great irony of this is that the west was only settled through large scale socialism in the form of water projects.)

As a member of a water rich, non-irrigated state, I am sick of the redistribution of wealth involved with getting water to those in more arid climates. My fellow citizens feel entitled to take as much of my tax money as they please, simply because they feel entitled to drinking water. Pshaw.
11.6.2008 9:53pm
rfg:
Lily- Actually, I don't think I'm self-righteous, just puzzled (but I could be wrong!).

Bod- I did not dictate, unless a suggestion that maybe she reconsider her priorities is dictating. as far as I'm concerned, she (and you) are perfectly free to pursue happiness in whatever manner you desire (provided you do no active harm to others). I will observe, though, that there is no guarantee that you will catch it.

I cannot decide for you what you need. You are the only one who should be able to do that. But, I can think about how you arrived at your choices. If I find I don't agree, it doen't make them invalid, just different.
11.6.2008 9:57pm
Metoo:

I don't think I'm self-righteous

Oh no, that's the first sign.
11.6.2008 10:00pm
Steve J. (www):
US Crime Rate well below European socilistic counties (which the table copied better)

We are #1 in Murder Rate
11.6.2008 10:02pm
realist:
Lily rocks. Obamabots have no clue. Maybe when they grow up and have kids they'll get it. I still have sick memories of when I was out of work, had health problems, a pregnant wife, and had to cough up almost $50k for taxes because I had a "good year" prior to that. For any couples, taxes are their biggest expense, then day care, then rent.
11.6.2008 10:03pm
Metoo:

I am sick of the redistribution of wealth involved with getting water to those in more arid climates. My fellow citizens feel entitled to take as much of my tax money as they please, simply because they feel entitled to drinking water.

People who use it should pay for it. If the cost is too high, they'll move.

For myself, I get tired to paying to rebuild for people who insist on living in the Mississippi flood plains or on the coast. I say, if you cannot afford to pay to rebuild, or to buy the insurance - move. Don't expect me to keep rebuilding for you year after year just because you like the view.
11.6.2008 10:04pm
Steve J. (www):
My decidedly middle class income, however, is taxes as if I make over $250,000.

That is simply not true.
11.6.2008 10:05pm
Steve J. (www):
its possible that I am being lectured about selfishness by people who are possibly paying little to no taxes.

Like hedge fund managers?
11.6.2008 10:07pm
autolykos:

If children are involved, the math does become more compelling. A quick google search leads me to assume a nominal $10,000/year in daycare costs. That means the real gain of one spouse working at $50,000 is $40,000 less the taxes. If the tax rate is a break point, seems to imply that $22,500 of after tax, after child care income is worth working for, while $20,500 is not. Again, it seems implausible that $2,500 is a true break point, when the $10,000 savings realizable by offsetting child care costs isn't a sufficient draw. With a combined income of $300,000, the real effect of $2,500 is negligible, a second order effect relative to typical investment fluctuations, and I can't see it being a rational driver in an economic sense.


The numbers are irrelevant. Every person makes their work/lifestyle choices based on how they value all of the aspects of work/life balance (money, time with family, joy of working, prestige, etc.). When you reduce the money, you shift the balance. For most people, that means they'll want to work less (I can think of precious few people who work just because they like to work - some certainly, but not many). Nobody claims to know how many people a 3% increase in taxes causes to choose less work over more work, but I don't know anyone that insists that it won't cause some to make that choice.
11.6.2008 10:12pm
bababooey (mail):
John S:

Look at my previous post for the numbers. You've missed a few things, including the cost of daycare for 3 kids and the fact that your child care should be grossed up to its after-tax cost.

Also, Obama has promised several different tax increases. For example, if he goes back to his primary promises and uncaps social security pension payments on your $250000, that's an extra $10 if you're an associate or $20 grand if you're a partner. As I said, we have to see what he actually enacts.
11.6.2008 10:16pm
Lily:

My decidedly middle class income, however, is taxes as if I make over $250,000.

That is simply not true.


Parden me, but it most certainly is true. The government taxes HOUSEHOLD income for a married couple. It doesn't differenciate WHO in the household makes the money, and in what amount. The Form 1040 asks - Total Salary - and taxes on that amount.
11.6.2008 10:17pm
Lily:


Like hedge fund managers?

By anyone who does not pay much in the way of income taxes. If you don't pay the taxes, don't lecture me about my attitude toward taxes. When you start to pay substantial taxes, when you are a net provider of tax money - then we can talk.
11.6.2008 10:22pm
Steve J. (www):
The government taxes HOUSEHOLD income for a married couple. It doesn't differenciate WHO in the household makes the money,

And you should not also not differentiate.
11.6.2008 10:32pm
Steve J. (www):
For most people, that means they'll want to work less

When Bush lowered the top marginal rates, the percent of people in the work force FELL.
11.6.2008 10:33pm
Lily:

And you should not also not differentiate.


Says you? Any resonable person would calculate this. You'd be a fool not to understand the economics of income / taxation on your pesonal finances.
11.6.2008 10:39pm
flyerhawk:
Hoosier,

Thanks for the response. Interesting stuff. Unfortunately it would appear everyone wants to bicker about the fairness of taxation.

Not sure what taxes have to do with exceptionalism but what can you do?
11.6.2008 10:41pm
Lily:

When Bush lowered the top marginal rates, the percent of people in the work force FELL


Really? Hmmmm.....


Total Payroll Jobs

May 2000 - 131.9 million.
May 2001 - 132.2 million.
May 2002 - 130.3 million.
May 2003 - 129.8 million. -Tax cuts Mid 2003-
May 2004 - 131.4 million.
May 2005 - 133.4 million.
Jan. 2006 - 134.4 million.
11.6.2008 10:56pm
autolykos:

When Bush lowered the top marginal rates, the percent of people in the work force FELL.


and?

There are so many variables at play in something as complex as the US economy it's silly to make any kind of causal assumption based on 1 datapoint. You act like we didn't have the collapse of most of the tech industry (and the industries, like law and investment banking, that it helped support) or an 8 month recession right at the beginning of Bush's term.
11.6.2008 11:07pm
autolykos:

Really? Hmmmm.....


Total Payroll Jobs

May 2000 - 131.9 million.
May 2001 - 132.2 million.
May 2002 - 130.3 million.
May 2003 - 129.8 million. -Tax cuts Mid 2003-
May 2004 - 131.4 million.
May 2005 - 133.4 million.
Jan. 2006 - 134.4 million.


Heh.
11.6.2008 11:10pm
MarkField (mail):

Mark assumes that if we just take care of everybody, then we'll live in such a great world


That's not my position at all.
11.6.2008 11:18pm
Steve J. (www):
AUTOLYKOS -

FYI:
FREDO'S ECONOMIC MEN SPEAK OUT
(h/t Brendan Nyhan and Brad DeLong)


House or Senate shake-up likely to end tax cuts
By Patrice Hill
THE WASHINGTON TIMES October 5, 2006:

Rob Portman, director of the Office of Management and Budget... Council of Economic Advisers Chairman Ed Lazear ... they conceded that the tax cuts have not prompted more people to get work and contribute to the economy, while they cut deeply into government revenue and contributed to record budget deficits that have not shown much improvement until recently.

Mr. Lazear conceded that the cut in the top tax rate from 38 percent to 33 percent and other Bush tax cuts should have provided an incentive for more people to work, but instead both men and women have been dropping out of the labor force.
11.6.2008 11:31pm
Terry Ott (mail):
I am a retired business owner living on savings and investments I made by working long hours, 40% of my nights away from my family for nearly 20 years as an owner/manager, with work stress related burnout ending my career at around 60. And I get Social Security, which pays a fraction of what I would have if I'd been allowed to invest it in my business (or in other ways).

I made the choices I did because I loved my work, got psychic income from happy clients and customers, and because I knew I was among the very best at doing what I did, and also at "growing" talented others who worked with me, and then seeing THEM succeed. To me, for a while, I got juiced by that just about as much as I have by seeing my own children and now grandchildren become accomplished people.

It was never about the money, per se. That's a fool's bargain, if you pay so much attention to the money side that you become obsessed by it. Most of the time I didn't even think about it. But when I did, it was all about having the resources to enjoy my (30 year?) post-career leisure, if I lived that long, and to take care of some family who needed help, and help some friends who got bad breaks.

The "per se" comment about money implies that for me it wasn't about living a lavish lifestyle at all, but it WAS and IS a form of recognition of how well I was doing my work. Some people doing basically what I did made maybe a third of what I took home and was able to invest, and to the competitive side of me, that was important to know. I lived pretty much as they did, but my net worth grew to several times as large; it was simply a function of being "better" competitively, with a big dose of working as if I was one day away from bankruptcy.

That lead in was too long, but where I am now is: I resent paying huge taxes, which I do as I liquidate my investments in order to live comfortably. It's not the recipients of help (via the government) that I loathe generally. They each have THEIR stories, and a lot of them just made bad choices early on and/or were poorly prepared in terms of understanding how to become self-sufficient. They will always be among us, and I for one am willing to pay something to take care of their needs. I'm sure there are some who scam the system, but all said I would rather they and the others in "real" need not be sleeping on cardboard in the gutters, not have hungry kids, not go untreated medically, and so on.

Here is the issue, though, for me. I rub up against government enough to observe how scandalously inefficient and ineffective it generally is at getting things accomplished. So when I sit down quarterly and drain my bank account, and sell investments so that I can write the very large checks for Federal and State taxes, and pay my property taxes (astronomical), it is with malice toward the enormous monster we have created to "govern" us. I think about what good would come of that same money if it were spent prudently. It is not. And that blisters my butt.

I'll go back to work rather than downscale as my assets disappear into the public coffers and vaporize due to the financial crisis. I'm working on deciding now what kind of work --- not the stressful kind, but the kind that a person with a fraction of my education and experience could be doing. I want to pay half my future taxes through "post retirement" employment until I am 80. That's the goal. It's the half that the government confiscates and then wastes. It's the half I'd like to leave in trust for the inevitable crisis situation that some descendent of mine will encounter. I'll be damned if government will confiscate me all the way down to zero, which they are in the process of doing otherwise. No one in my family will need to count on "help from the government" if I can pull it off, because that's nothing to REALLY count on from the scoundrels and do-nothings who populate much of the public sector. And that's why I worked like a mule for so long and lived as I did.
11.6.2008 11:56pm
autolykos:

Mr. Lazear conceded that the cut in the top tax rate from 38 percent to 33 percent and other Bush tax cuts should have provided an incentive for more people to work, but instead both men and women have been dropping out of the labor force.


1. That doesn't refute my point (it's the converse).
2. The numbers are right there in Lily's post. I don't know how an increase of almost 5 million jobs translates into "men and women have been dropping out of the labor force." Perhaps a link to the actual story would be more instructive.
3. Again, if you really want to look at the effect, it's not enough to look at 1 datapoint. There are lots of reasons people leave the workforce (retirement, child-rearing, unemployment, etc.). I'm not sure how many different ways I need to say this, but go ahead and post some other non-responsive article that takes an overly simplistic view of the US economy if you'd like.
4. It strikes me as incredibly silly to talk about overall employment numbers when you're complaining about decreases in the top tax rate.
11.7.2008 12:45am
David Warner:
Markfield,

"Mark assumes that if we just take care of everybody, then we'll live in such a great world

That's not my position at all."

Why not? Sounds like a pretty good starting point. Old Scratch, of course, lurking in the details.
11.7.2008 1:17am
Steve J. (www):
4. It strikes me as incredibly silly to talk about overall employment numbers when you're complaining about decreases in the top tax rate.

It strikes you as silly because you are unfamiliar with supply-side ideology. One of the predictions of the Free Market Fantasists is that tax cuts will increase the percentage of people in the work force. That prediction has been falsified.
11.7.2008 1:39am
Athomedad (mail):
One of the annoying things brought out in this Post is people's ignorance of Obama's proposals.

Yes he is only proposing to raise the top bracket's income taxes by 3+%, but he is also discussing raising FICA by at least 4% to as much as the full FICA amount on those same tax payers. Additionally he is proposing new deductions and credits, those phase out at upper income levels raising the marginal change. So the full impact should be well over 10%. That doesn't include raises in state taxes.

The upshot is that if you are a Lawyer making above $250,000 K in Manhattan each marginal dollar could easily be taxed in excess of 60% while your deductions are being phased out. These changes do influence behavior.

Also I find it striking that people that wouldn't ask me directly for $100 are willing to demand through the intermediary of government a thousand times that amount.
11.7.2008 1:40am
FDE (mail):
Obama has been paining Congress for two years and we now have five year foreign aid cash free money and loans. The US is broke. Obama's banking pals at Merrill, etc. had the US bail them out just as they sold to the foreigners and we went into another election, like the vote for the foreign aid cash is just before the Presidential elections and the US government budget vote.

The last two years has been to keep Obama and his pals happy or we're pained or used.

Jesus is the wafer, not me.
11.7.2008 3:14am
Elliot123 (mail):
"It is suspect to me that that $2,500 out of $300,000 is truly a make or break decision point for working vs. not working, if working is truly a fulfilling choice."


Well, suppose working isn't truly fulfilling, but we do it anyway. I suspect that's the situation with most of us.

The decision isn't to work or not work, it is whether to take the risk to make an additional $10,000. Perhaps I am contemplating hiring an additional employee, and think I can make an additional $10,000 profit. I'm not sure it will work, so there is an element of risk. The more of that $10,000 the government takes, the lower my potential reward becomes.

If you think a 3% increase doesn't matter in these decisions, at what point does an increase matter? How about another 3%? Does that matter? Another 3%? Matter?

How about in aerospace? Does an extra 3% cost in a plane matter? Is that something the engineers just ignore? No big deal? Doesn't matter? Not make or break?
11.7.2008 10:42am
TSH:
My job in the field of asset protection has taught me an invaluable lesson: you cannot beat confiscatory taxation on its home turf. There are millions of voters that think they possess a claim to the fruits of your labor, and no amount of reason will dissuade them of this. A tax increase of 3%, 1%, or even .1% is too much when you know that there are members of your community that pay nothing (or close to it), yet still receive access to the services that you are forced to provide. Nonetheless, that is the way it works.

My suggestion to Lily (and the posters that share her problem) is that she devote more of her energy to avoiding taxes in the first place by restructuring her family's income so that a majority of it can be used before taxes are computed. Please note that I do not suggest tax evasion, but rather the use of the tax code in such a way that your deductions are minimized. We have clients that make over $250,000 a year, yet pay taxes on only $45,000 a year through creative deductions, LLC formations, etc. It costs money to pursue this type of arrangement, but it is less than you would hand over to politicians. Aside from that, you have the added benefit of annoying people like Steve J.

I should also point out that you need to make an appointment with your accountant and ask him or her some pointed questions regarding his or her opinion of taxes. It is a common belief that accountants think less taxes is better taxes, but that is not true. Among the millions that voted for our new President-Elect on Tuesday, there are surely some accountants that think a 3% increase isn't so bad, and yours may be one of them.
11.7.2008 10:54am
Lily:
Dear TSH,

Thank you for your kind advice. Makes sense.

Lily
11.7.2008 11:39am
Metoo:
Thomas Jefferson said

“A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government.”

“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”

"To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.”
11.7.2008 12:17pm
MarkField (mail):
Metoo, do you have a cite from Jefferson's works for the last two quotes? I believe they're phony.
11.7.2008 12:24pm
Metoo:
Really, thats a shame - many sites quote them, but I will look for a reference. In the mean time, how do you like this one:

“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
11.7.2008 12:34pm
Metoo:
No, I'm not sure you're right about the phony quote thing. I find many sites that attribute the quote to Jefferson, but can't find any debunking that he actually said them. Maybe you've been misled.

www.quotedb.com/quotes/2530
www.quotationspage.com/quote/31399.html
www.brainyquote.com/quotes/quotes/t/thomasjeff157246.html

Please show me a reputable site debunking those quotes
11.7.2008 12:51pm
wfjag:

If you think a 3% increase doesn't matter in these decisions, at what point does an increase matter? How about another 3%? Does that matter? Another 3%? Matter?

Careful Elliot, you're giving away the Obama tax plan. When the first 3% increase doesn't generate enough tax revenue to pay for the increased expendatures, then another de minimus 3% increase is added. Repeat as necessary to achieve intended result. After all, if 3% wasn't a big deal the first time, what's another 3%, another 3%, . . .

And, it's an income tax, not a wealth tax -- something TSH clearly understands, but Steve J does not.
11.7.2008 3:00pm
MarkField (mail):
Ok, the first one (pretense) is legit. I found it here.

I can't find a source for the second one. Everyone just claims "Jefferson said it". Maybe he did; I just haven't seen it before.

I've always like the tree of liberty quote.
11.7.2008 3:24pm
zipkin119 (mail):
Re: exceptionalism. Let's see: we've had slavery, an attempted genocide, sporadic bouts with imperialism (Phillippines, e.g.)--so of course we're different from, and better than, anybody else. What stands as the justification for a claim of exceptionalism is our founding idea, and that's what Obama's election (whatever his administration may or may not do) revivifies.
11.7.2008 9:32pm
Elliot123 (mail):
I suppose Mike Tyson's election as president would revivify, too.
11.7.2008 9:35pm
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