JONATHAN CHAIT OCTOBER 25, 2010
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Last week, Michael Kinsley wrote a really smart column completely dismantling the shoddy mathematical underpinnings of Greg Mankiw's self-pitying column about how high marginal tax rates will ruin his children's life. I linked it, with the headline, "Kinsley Curb Stomps Mankiw." This has Megan McArdle quite upset, and convinced once again that bloggers who are not Megan McArdle are driven by rage:
Call me a vaporing language nanny, but I thought it was pretty creepy when Jon Chait described another liberal journalist, Michael Kinsley, another journalist, as "curb stomping" economist Greg Mankiw for, yes, daring to suggest that higher marginal tax rates might have incentive effects. Woo-hoo! ...
But why stop with curb-stomping? Wouldn't it be fun to pile ten-thousand gleaming skulls of supply-siders outside the Heritage Offices? We could mount Art Laffer's head on a rotating musical pike that plays The Stars and Stripes Forever! Then, in the most hilarious surprise ending of all, the mob could turn on Jon Chait, douse him with gasoline and set him on fire, and then sack the offices of the New Republic!
Somehow, that's not actually funny.
I'm willing to take my chances that the blog headline in question does not lead to me being burned alive. But, honestly, I'm sorry I gave offense. It was a headline I wrote quickly, and I thought the image of Mike Kinsley engaged in an act of violence was kind of funny because Mike is not really the violent sort, to say the least. Anyway, one person's little joke is another person's "rage of people who cannot bear to see their sacred ideals profaned," to quote McArdle.
Anyway, like I said, I'm not really worried that my blog item will instigate mobs to violence. But there's no point in causing McArdle such immense trauma over something I considered so trivial. So I will hereby endeavor to avoid any future headlines that would seem to celebrate violence or conceivably endanger the physical safety of Arthur Laffer or anybody else.
8 comments
Here's Mankiw's response on his blog (who's on 1st here?): Wednesday, October 20, 2010 KINESLEY'S MISTAKES Michael Kinsley, one of my favorite liberal journalists, says I got my math wrong in my latest NY Times column. Let me take exception to four points he makes: 1. Mike says, "Mankiw assumes that his investment earns 8 percent every year and is subject to the corporate income tax at 35 percent and then to the individual income tax at its full fury of 40 percent on whatever’s left." No, I did not assume that at all. If I had assumed that, then the after-tax return would be 8 x (1-.35) x (1-.4) = 3.19 percent. In the article, I used “about 4 percent” as the after-tax return, recognizing that dividends and capital gains are taxed at a lower rate. 2. Mike says, "The top marginal tax rate on dividends and capital gains — the two main ways investors recoup their investments — is 15 percent." No, it is not, at least under the current administration's policies. President Obama has proposed raising the tax rate on dividends and capital gains to 20 percent. In addition, the healthcare bill applies the new 3.8 percent Medicare tax to investment income. Moreover, the state of Massachusetts (and many others) taxes that income as well. So my marginal tax rate on dividends and capital gains is really about 27 percent. That would yield an after-tax return of 8 x (1-.35) x (1-.27) = 3.8 percent. I rounded up to 4 percent, as a rough attempt to take into account the benefits of deferral. 3. Mike says, "Mankiw’s assumption of an 8 percent return for 30 straight years seems optimistic." No, I don't think so. Recall that this is a rate of return before all taxes, including corporate income taxes. Also, it is worth thinking for a moment about whether this return is best viewed as real or nominal. (I skirted this issue in my column, for reasons of space.) The tax code taxes nominal returns--that is, capital gains are not indexed for inflation. As a result, for purposes of tax calculations such as these, the right return to use is arguably a nominal return. A long-term before-all-tax nominal return of 8 percent seems, if anything, too low. 4. Mike says, "If Mankiw’s marginal tax rate has actually been 80 percent for all these years, it doesn’t seem to have affected his incentives very much, and 90 percent won’t, either." Mike might recall that he has, as an editor, several times tried to recruit me to write something for him. I turned him down every time. If he had offered me a reasonable fee, and somehow could have promised that this income and all the investment returns it subsequently generated would be free of all taxes, I might well have accepted the jobs.
- SRC--Mpls
October 25, 2010 at 2:34pm
"Wouldn't it be fun to pile ten-thousand gleaming skulls of supply-siders outside the Heritage Offices? We could mount Art Laffer's head on a rotating musical pike that plays The Stars and Stripes Forever! " Hmm, now that you mention it....
- tnmats
October 25, 2010 at 2:58pm
Given that Michael Kinsley suffers from Parkinson's Disease, I would imagine that curb-stomping might not be among the things that he could do well even if he was more violently inclined. On the other hand, if the headline was, "Kinsley Grabs Maniw and Shakes Him Like a Leaf," I think Megs would be right to be outraged.
- wildboy
October 25, 2010 at 3:47pm
Personally, I have always wanted to chain McArdle, Grover Norquist, and the rest of those Club For Growth types to a massive grindstones (as seen in the peerless cinematic achievement "Conan the Barbarian") while an endless loop of The Guess Who's "Share The Land" plays. The grain would then be distributed free to the homeless, crack-addicted minorities, and illegal immigrants.
- austinexpat
October 25, 2010 at 4:02pm
"So I will hereby endeavor to avoid any future headlines that would seem to celebrate violence or conceivably endanger the physical safety of Arthur Laffer or anybody else." Right. Leave that to us commenters.
- timteeter
October 25, 2010 at 5:23pm
I liked the curb-stomp image. I also like Megan. What's a conscientious anarchist to do?
- Robert Powell
October 25, 2010 at 5:32pm
It's rich that the World's Smartest Airhead is up in arms over this after spending literally years telling people who were offended by her "war protesters deserve to be smacked on the head with two-by-fours" comment to lighten up and find their sense of whimsy.
- W_Bombay
October 25, 2010 at 6:28pm
Conservatives love to complain about the culture of complaint. They have a point, though many of their numbers come under this rubric. The idea that rage drove J. Chait to write this headline is simply risible. What are you Megan, some kind of namby-pamby liberal? And Dr. Bombay catches you out in hypocrisy, as well.
- liberal reformer
October 26, 2010 at 11:08am