Celebrating humanity's flourishing through the spread of capitalism and the rule of law
16 Mar 2015 Leave a comment
in income redistribution, labour economics, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality, welfare reform Tags: child poverty, welfare state
The figure shows pre-transfer and post-transfer poverty rates among OECD countries (mostly the advanced economies). The former (pre-transfer) are the market-driven poverty rates, before the tax and transfer systems kick in.
Source: OECD, *Poverty thresholds: 50% of median income.
14 Mar 2015 Leave a comment
in income redistribution, sports economics Tags: expressive politics, expressive voting, top 1%
14 Mar 2015 Leave a comment
in income redistribution, politics - USA, Public Choice, rentseeking Tags: China
02 Mar 2015 Leave a comment
in applied welfare economics, income redistribution, politics - USA, rentseeking Tags: Obamacare, rational ignorance
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Almost everyone who has health insurance in the United States gets help from the government to afford it.
For the elderly, that’s Medicare. For the disabled and the poor, that’s Medicaid. For full-time workers it’s the tax subsidy for employer-provided health insurance.
via Americans are making a big mistake about health care – Vox.
26 Feb 2015 Leave a comment
in applied welfare economics, income redistribution, politics - New Zealand, Public Choice, rentseeking Tags: Left-wing hypocrisy, New Zealand superannuation, old age pensions
Michael Littlewood from the Retirement Policy and Research Centre has a commentary on redesigning NZ Superannuation. He says (and I agree) that we should not just look at one issue in isolation or just the cost.
He highlights eight key design features that should be agreed on. They are:
- Universal or means-tested (I favour means-tested if the administrative costs of doing so are not prohibitive)
- Age of entitlement (I favour increasing it and tying it to life expectancy)
- Residency test – how long should someone live here to quality. The current threshold is ten years and I think it should be higher. It used to be 25 years.
- The level. Currently is 43% of the net average wage for a single person. Set at 66% of the after-tax national average wage for a couple.
- How to revalue? Is indexed to both CPI and the average wage.
- How to pay for it? Pay as you go and partially pre-funded. Should it be both? What should the mix be?
- Payments to single people? Why does a married couple get less than two singles living together?
- Overseas pensions? The rules for deducting overseas pensions are inconsistent
via Redesigning NZ Super | Kiwiblog.
I was walking back to the office with a mate who I will call the ecological socialist after a meeting with the government department responsible for income support to old age people in New Zealand.
We were both shaky our heads in utter disbelief. We couldn’t understand their idea of defending an old age pension that is free of any means test been paid to millionaires on the grounds of egalitarianism.
By coincidence, we are both Australians where the old age pension is means tested. We couldn’t understand in any way, shape or form the notion of paying old age pensions to rich people when that money could be used to increase the old age pension for those who we lived in ordinary circumstances all their lives and couldn’t save for their retirement.
22 Feb 2015 Leave a comment
in income redistribution, politics - USA, poverty and inequality, welfare reform Tags: capitalism and freedom, poverty and inequality, The Great Enrichment, top 1%
Over the past one-, two-, and three-decade periods, both middle class and poor households have experienced noticeable gains in living standards. Their gains are slower than those experienced by middle-income families in the earlier post-war era, but the gains are well above zero.
In 1980, in-kind benefits and employer and government spending on health insurance accounted for just 6% of the after-tax incomes of households in the middle one-fifth of the distribution. By 2010 these in-kind income sources represented 17% of middle class households’ after-tax income
…The broadest and most accurate measures of household income are published by the CBO. CBO’s newest estimates confirm the long-term trend toward greater inequality, driven mainly by turbo-charged gains in market income at the very top of the distribution. The market incomes of the top 1% are extraordinarily cyclical, however. They soar in economic expansions and plunge in recessions. Income changes since 2007 fit this pattern.
What many observers miss, however, is the success of the nation’s tax and transfer systems in protecting low- and middle-income Americans against the full effects of a depressed economy.
via Gary Burtless
19 Feb 2015 Leave a comment
in income redistribution, labour economics, poverty and inequality Tags: The Great Enrichment, top 1%
Everyone is 30-50% richer.
![Microsoft PowerPoint - Group C Federal Budget (KF).pptx [Read-Only]](https://utopiayouarestandinginit.com/wp-content/uploads/2015/02/0014_taxes-income-full.gif "Microsoft PowerPoint - Group C Federal Budget (KF).pptx [Read-Only]")
Ordinary Americans do not pay much in taxes.
Low income Americans receive large amounts of government transfers and increases their income by at least 50%
The middle-class is getting seriously smaller because more of them are getting richer
17 Feb 2015 5 Comments
14 Feb 2015 Leave a comment
in income redistribution, politics - USA, Public Choice Tags: 2008 presidential election, Director's Law, expressive voting, median voter theorem, voter demographics, Withering away of the proletariat
One of the things I noticed in the 2008 US presidential campaign was everyone was appealing for the middle class vote. Presidential primary and general election debates were about how things were getting harder for the middle-class and the Republican or Democratic candidate who happen to be pitching for votes would stand up for the middle-class better than their competition in the presidential primary or general election at hand.
Another big feature in the 2008 presidential campaign was Joe the plumber. This was the small businessman who asked then candidate Obama at a rope line three days before the final presidential debate about his plans to put up taxes. Obama replied he wanted to spread the wealth around. Obama’s response was
It’s not that I want to punish your success. I just want to make sure that everybody who is behind you, that they’ve got a chance at success, too… My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody.
If you’ve got a plumbing business, you’re gonna be better off… if you’ve got a whole bunch of customers who can afford to hire you, and right now everybody’s so pinched that business is bad for everybody and I think when you spread the wealth around, it’s good for everybody
Andrew Cherlin did the service counting up references to the working class in State of the Union addresses since President Obama was elected.
In his State of the Union addresses, Obama has used the term middle class 28 times. But he has never said “working class” except in 2011, when he described Vice President Biden, who was seated behind him, as “a working-class kid from Scranton.”
This dearth of references to the working class is no surprise in light of Director’s Law and the median voter theorem. Politicians who do not pitch to the American middle class will not win elections unless there is a lot of expressive voting by the educated middle class. In general social surveys of Americans, 44% identify as working class and 44% identify as middle class.
Republicans consistently win voters making $50,000 or more – the U.S. median income. The margin doesn’t vary much: In 2012, Mitt Romney got 53% of this group’s vote; in 2010, Republican House candidates got 55%.
The margin by which the Republicans win income brackets above 50,000 doesn’t vary much if you just look at those earning above $100,000 or those earning between $50,000 and $75,000. These margins only matter in a close election, a very close election.
Democrats consistently win voters making less than the median but the margin varies. Whether the Democrats win these voters earning less than $50,000 by a 10-point or a 20-point margin tells you who won every national election for the past decade.
The Democrats would also do well among the college educated vote. Obama won this over Romney and 2012 by 10 percentage points. This may explain why the Democrats are slightly conflicting: they must win the working class vote as well as the college educated vote to win.
Andrew Cherlin didn’t give many reasons for the disappearance of working class from modern American political discourse, but he showed some insight into expressive politics when he observed that:
Politicians may prefer to call working-class families by the class position they aspire to rather than the one they hold.
12 Feb 2015 Leave a comment
in economic growth, human capital, income redistribution, politics - USA, poverty and inequality Tags: middle class stagnation
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