ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Monday, May 02, 2005

More Sirota idiocy

I supposed having sat through 3 years of Journalism school would give someone the opinion that they're an economic genius, but Dave Sirota really is idiotic in this post. He decries the current return on Social Security (which I agree with him on), but recommends a solution that is widely different than something I would recommend. He wants to raise taxes... No, we don't need to utilize the averagg 10% per year return that investment provides in the long term, with the added benefit that the asset is owned by that individual and can be passed down to future generations to help with their retirement.

Nope...

Just raise taxes on corporations and balance the budget!

This seems to be the same angle that Pelosi is pushing for, since she won't face reality that any changes to the program to address solvency will require either increase taxes (which she's for, but can't say so publicly) or decrease in benefits (which she's against, although won't admit that Personal Retirement Accounts are the best way to INCREASE benefits for future retirees). She repeated multiple times on This Week how balancing the budget is the way to fix soshsecurity....

(BTW, what happens when you raise taxes on corporations? Do they just take the brunt of the tax and send in the check? perhaps for the first year. But then they either increase their prices to consumers to cover the increased cost of doing business or reduce costs through layoffs... or they take legal actions which limit their liability under the US tax code.)

Anyway, Sirota argues that the middle class is being crushed by an increase in taxation thanks to Bush's "tax cuts." He points to the following disingenuous WaPo story for his evidence... either he didn't read the story or gets confused by all of those numbers. This chart is an illustration of what Sirota views as crushing the middle class:

So, the top 20% of Americans pay 64% (!!!!) of all federal government tax receipts. Bush's tax cuts increased the share of the federal taxes paid by the middle class by less than 1% and Sirota is having a cow.

Nevermind that in actual dollar values, EVERYONE got a tax cut - so their individual payments to the federal government went down. If you send in a check to me for $100 one year and your share of my total receipts is 10%, that means that I took in $1000, right? What if I tell you to only send in $95 dollars next year? Is this a cut? Yes. Do you benefit? Yes. But, let's assume that I tell EVERYONE that they can cut their contribution by varying amounts... I now take in a total amount of $900. Did you get still get a cut? Yes. Did your share of the total amount increase? Yes.

In this case, the WaPo graphic (and Sirota) fail to mention the number of people within each income group. That truly would demonstrate that a minority of Americans are paying the lion's share of federal income tax receipts.

Recommendation to Sirota - Instead of that creative writing class, take a class in economics and math... I know, I know... it's tough for you to get your head around all those concepts without Bernie Sanders telling you what to think, but I'm confident that you can hack it. Take the classes twice if you have to.

(BTW, this is one of the problems with the profession of journalism... they know more about how to talk about subjects than they do about the subjects themselves. If I ran a university, I'd probably have a journalism program that was only a year long and only accepted people AFTER they had taken courses or had serious experience in other subjects.)

***UPDATE***
CORRECTION: Unfortunately, when I wrote this post, I had David Sirota (guy who makes a living at being stupid) confused with Ezra Klein (UCLA Journalism Junior who aspires to make a living at being stupid). I apologize for my error.
***END UPDATE***

Your Co-Conspirator,
ARC: St Wendeler