The Tax and Spend Future
Stockmann department store in Helsinki, Finland (my photo, available under cc license)
I largely agree with the substance of Gregory Clark’s case for higher taxes on the right. One thing I would say, though, is that curbing growing inequality through more taxes and more spending isn’t just a matter of giving poor people more cash payments. If you walk around the streets of any major American city you’ll swiftly see that they’re a lot dirtier than the streets of, say, Helsinki. But they’re not as dirty as they might be—people clean them.
People clean them, not robots. Rich people hire low-skilled workers to clean their privately owned spaces to a very high standard. We could, in addition, increases taxes on the wealthy and hire more low-skilled workers to clean our streets to a higher standard. That would mean cleaner streets for everyone, which would benefit everyone, but especially those without the means to afford lavish private spaces. And it would also be jobs and meaningful employment.
37 Responses to “The Tax and Spend Future”
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August 9th, 2009 at 10:04 am
I too am in favor of higher taxes on the right. All registered Republicans should be required to pay a surcharge equal to their individual share of the debt incurred by the unnecessary war in Iraq.
Raising taxes on the rich might also be a good idea.
August 9th, 2009 at 10:13 am
Higher taxes on the right not only would help pay for the Iraq war and Reagan/Bush/Bush deficits, as James Gary said, but it would also increase the number of people voting for Democrats or leftist independents.
It is a good policy, and good politics too.
August 9th, 2009 at 10:20 am
Shhhhh. We don’t want the secret that Democrats don’t pay taxes to get out.
August 9th, 2009 at 10:23 am
There are many good comments shredding the column over at Thoma’s, Bruce Wilder’s in particular, Clark’s vision of a two-tiered society with the upper tier handing crumbs to the lumpenproletariat is not socially or politically acceptable. The “generous rich” providing succor to the rest via the welfare state is essentially the model of neo-liberalism. It definitely and forever leaves the power in the hands of the rich and the dignity and security of the rest conditional.
The rich must be taxed out of existence, or into a powerless minority.
Gov’t created jobs, direct or indirect, are of course the answer but they should be across a very wide income spectrum so that all quintiles are partly dependent on and supportive of gov’t programs. Not just streetsweepers.
August 9th, 2009 at 10:24 am
Greg Clark does seem to have been smoking something in that piece.
“as machines expand their domain, basic wages could easily fall so low that families cannot support themselves without public assistance. ”
Umm, as machines expand their domain and goods and services manufactured by these machines become ever cheaper, then real wages are going to fall?
This is nonsense. As goods and services fall in price then real wages (ie, the amount of goods and services you can purchase) rise, not fall.
For example, the real value of the poverty line has not risen since the 60s (adjusted only for inflation). Yet then one third of that would have been spent on food, for that is how it was set. Food budgets for those on the poverty line are now more like 10-15% of that household budget.
So what is Clark on about?
August 9th, 2009 at 10:44 am
[...] working man, don’t trust whitey, see a doctor and get rid of it. Matthew Yglesias is a funny guy. He reminds me of a smart, amusing, and very serious 4-year old; you know, a 4-year old saying [...]
August 9th, 2009 at 10:58 am
Clark considers the possibility of improving the educational system so that the poor can earn a higher income. But he doubts that this will work because “much of the supposed improvement in high school and college graduation rates has come by asking less of graduates.” (As a professor, he should know.)
Much of the work of education is done by parents’ providing a favorable environment for education and human development. The problem is that many of the poor have neither the time nor the inclination to provide such an environment. Perhaps children should be taken from their parents and brought up by the State. That is the only solution to the issue he raises that I can see.
August 9th, 2009 at 11:01 am
This is nonsense. As goods and services fall in price then real wages (ie, the amount of goods and services you can purchase) rise, not fall.
Well not necessarily, you can easily imagine a society where manufacturing jobs dwindle because of increased productivity per person due to robots. Those with the manufacturing jobs would get paid more in real terms. The US would presumably continue to have positions in a few high wage sectors such as finance and the healthcare industry, but you do have to ask what those who would have been working on the assembly line but are no longer needed will be doing. Most likely they will be pushed into lower paying service sector jobs–Wal Mart, telemarketing, etc.–and they would suffer either a loss in real wages.
August 9th, 2009 at 11:08 am
Bob, This can’t seriously be the first time you’ve noticed this is a neoliberal blog?
There’s a reason why I’m such a dick to these people. They are scum, and it’s what they deserve.
August 9th, 2009 at 11:09 am
Tim, he means wages for the least-skilled workers. The real wage for members of the ruling class like you and me are going to be superb.
August 9th, 2009 at 11:12 am
Maybe Helsinki is cleaner – I haven’t been there. But you can’t be serious about the rest of Europe – I’ve traveled through a lot of Europe over the last decade, and the American cities I travel through are generally much, much cleaner than European ones. Both in terms of general trash, and in terms of graffiti. NY, for instance, isn’t filled with graffiti in the tourist areas – most European cities sadly are.
I don’t think this has much to do with taxation levels though – it has more to do with how successfully (not so much in Europe) immigrants have been integrated into the larger society.
August 9th, 2009 at 11:16 am
I think the piece has some serious flaws. I think it basically commits the lump of labor fallacy. The fact is that we will always be able to have a slightly higher GDP by having people work then if we leaave them unemployed. So machines can never permenantly displace people in the economy. There is a simpler problem though. Does a poor person in 2100 whose standard of living is higher than mine have a legitimate claim that the world has been unjest to them?
August 9th, 2009 at 11:20 am
Walt & Tim, my interpretation was that he was seeing unskilled jobs simply disappearing, and of course lower wages for those that are left.
And here’s the Thoma link, which has good points in comments, as was mentioned:
http://economistsview.typepad.com/economistsview/2009/08/machinesourcing.html#comments
August 9th, 2009 at 11:25 am
Is this a joke? This sounds like an intro to Atlas Shrugged. “In a world…where the rich are taxed to support the poor….” We may be liberal softies, but we should at least make sense.
Paying people for no reason other than they exist is obviously untenable. They’ll live meagerly, resent it, and continue to steal and riot.
I guess another solution to the problem of many people with no marketable skills is to deport them. We import people based on their abilities, but we have an asymmetric lower limit to social mobility — once in, you can’t be forced to leave.
Maybe citizenship is something you need to prove you’ve earned at age 18. Or maybe later, if you’re going to college, say. You prove you’re not an illiterate juvenile delinquent by 18, or you’re on the next boat out. You prove you can hold down a job and pay your own way by 21, or you’re out. Starting a family? Show us the money by age 25. And so forth and so on.
There is already some precedent for this in the immigration process. Someone who wishes to sponsor someone’s visa must show that they have money in the bank so that the immigrant won’t be a burden on the state.
August 9th, 2009 at 11:55 am
Gmorbgmibgnikgnok says: You prove you’re not an illiterate juvenile delinquent by 18, or you’re on the next boat out. You prove you can hold down a job and pay your own way by 21, or you’re out.
Out to where?
August 9th, 2009 at 11:57 am
Yeah, it’s fun to pretend that it’s the early 1900s and redistributionist economic models are the hot new thing. But here in real life, that crap has been tried, it has been measured, and it sucks.
Also, lost in the depths of his concern for the poor, Matthew may not have noticed that there are street sweepers employed in DC and every other American city I’ve lived in (employed to operate industrial size sweeping machines and to push a broom). If we need more, we should definitely hire some, but it doesn’t strike me as a particularly good vehicle for imposing a confiscatory tax on the rich.
August 9th, 2009 at 12:00 pm
….Clark’s vision of a two-tiered society with the upper tier handing crumbs to the lumpenproletariat is not socially or politically acceptable
Given enough force, and a sufficiently strong attachment to an appropriately structured religion, it can be made acceptable for centuries on end. Acceptability can be manufactured like cornflakes.
August 9th, 2009 at 12:15 pm
Honestly, I don’t care. The middle of the Atlantic suits me fine.
Slightly more seriously, to one of the countries with whom we have immigration treaties. Deported individuals are net liabilities, whereas legal immigrants are net assets. Illegal immigrants are illegal, and get shipped back from whence they came. It would then be possible to set up a balance of trade between us and other countries, where we “buy” their high-value immigrants and pay them for sending our rejects.
August 9th, 2009 at 12:22 pm
there are street sweepers employed in DC and every other American city I’ve lived in
Get outside the main city areas, especially along the freeways, and you’re in the domain of the prison road crew, aka the welfare system white America is happy to pay for.
Which reminds me: does Sailer have morning cross-burning on Sundays, or is he teaching Racial Determinism Sunday School to the little white kiddiwinks? He should have been here by now with his usual one-liner.
August 9th, 2009 at 12:31 pm
pseudonymous in nc says: Get outside the main city areas, especially along the freeways, and you’re in the domain of the prison road crew, aka the welfare system white America is happy to pay for.
And look out of the window on your next ride on the commuter rails. A vista of trash and debris.
August 9th, 2009 at 1:13 pm
Well quite obviously to all the countries who would love to have more illiterate juvenile delinquents. What bad scifi novel were you reading that made you think this was a good idea?
August 9th, 2009 at 1:43 pm
Really, the quality of conservative trolls that comment on Matt’s blog is suffering. Deport poor people to the atlantic? It’s like they’re getting their politics from Heinlein or something.
August 9th, 2009 at 2:12 pm
Gmorbgmibgnikgnok Says: It would then be possible to set up a balance of trade between us and other countries, where we “buy” their high-value immigrants and pay them for sending our rejects.
Hmm…you know slavery was outlawed in the US, don’t you? And that sending “rejects” to the Gulag has gone out of style?
August 9th, 2009 at 4:03 pm
I think Matthew needs to get out of New York and Washington more often. In my experience, American cities tend to be much cleaner than European ones.
August 9th, 2009 at 4:40 pm
Matthew Yglesias: Proving they do it better in Spitzbergen since 2002!
August 9th, 2009 at 5:27 pm
I say subsidize parenting for the working poor. If one parent could afford to stay home with their child(ren) on leave from work, until the child(ren) is/are three years old, we would have much healthier, happier children, less crime, less mental illness, less stupidity.
Infants in day-care for a large chunk of their infancy is an abomination, but most working families need two incomes.
August 9th, 2009 at 5:28 pm
Although it pains me to say it, James Robertson is right…about graffiti. I’ve not seen any good explanation for the extensive presence of graffiti in Europe.
There is generally much less trash in European cities and fewer homeless people.
August 9th, 2009 at 5:29 pm
Though to be fair, my hometown of Chicago is currently immaculately clean (at least in the Loopy parts). We’ll see if it can sustain it after Daley II dies.
August 9th, 2009 at 6:45 pm
The “bought” immigrants wouldn’t be slaves, any more than H1-B’s are today. A sponsor (e.g., Microsoft) would have to pay for it, in return for a finite period of indentured servitude (e.g., 2 years). After that, they’d be citizens and free agents. By the way, fixing the period of indentured servitude is a big step up from the present system, where no such guarantee exists.
As far as today’s fashions, that’s cyclical. Ten years ago you would might have told me that torture is passe, because we had defeated all our enemies. Ten years from now, technology will have advanced while people will have not. There will be even more unemployable people than there are now. And they’ll be demanding a greater share of the pie, for no really good reason other than they exist.
August 9th, 2009 at 7:03 pm
Yeah, I guess I can see how you read it that way. But I’m not a conservative, nor a fan of science fiction. Here’s where I’m coming from: Have you ever seen Real Americans upset — REALLY angry — that “their” jobs got shipped overseas, and that the government isn’t doing enough to help them? Meanwhile, Mexicans are risking death crossing deserts to find work here. Vietnamese came here with nothing, and within a generation, sent their kids to the Ivy Leagues.
But, if you go over to sites like VDARE, it’s apparently the Mexicans, Vietnamese, etc. who are ruining this country.
If I have to give away my tax dollars, I want to “buy up” all those hard-working foreigners who’ll crawl through broken glass to get here. Conversely, those who believe this standard of living is their birthright don’t belong here.
August 9th, 2009 at 11:23 pm
If I have to give away my tax dollars, I want to “buy up” all those hard-working foreigners who’ll crawl through broken glass to get here. Conversely, those who believe this standard of living is their birthright don’t belong here.
Well I hope you deport yourself to the middle of the Atlantic. You are clearly not as productive as the Mexicans and Vietnamese. You waste your time by posting on Internet blogs.
August 10th, 2009 at 12:26 am
Great, expect that those Northern European countries are mainly cleaner because they dont throw away so much things on the street. Now imagine you would tell people that they would pay with their taxes for cleaning up anyway and help a poor guy to get a job. That would certainly help to encourage people to be less anoying throw away things on the streets idiots.
August 10th, 2009 at 2:53 am
The health care debate has been so enjoyable, I can’t wait for the debate over a “more efficient” tax system to directly subsidize large portions of society. What will the unemployment rate be in this future scenario? It sounds pretty high.
I’m not opposed to people cleaning up cities, but if we’re going down that route, why not actually build things? Our “crumbling” infrastructure will certainly need work.
August 10th, 2009 at 3:53 am
Brad, I would presume Matt is talking about generally having more public sector workers building and maintaining infrastructure. The idea that he’s calling for a multi-trillion dollars program to have one street cleaner for ever 10 citizens is pretty unlikely, IMO.
August 10th, 2009 at 8:52 am
Matt says: People clean [the streets], not robots.
I suspect conservatives will be OK with spending money to clean the streets once the work can be done by robots rather than people.
August 10th, 2009 at 10:19 am
Congress should just pass EFCA and repeal Taft-Hartley. Those two things would go a long way towards rebalancing the power of workers relative to share holders. That would save the fiscal policy a lot of trouble.
August 11th, 2009 at 2:26 am
The Flight of the Conchords beat Gregory Clark to it: