Opinion

Felix Salmon

Counterparties

By Felix Salmon
September 23, 2010

Hedge funds say a busier market creates a healthier economy. But the lesson of the last two years is that this isn’t true — Bloomberg

Permanent HAMP mods fall 26% in August — Housingwire

NYC runs a $40k art competition with 150 winners. So far, it’s received 20 entries — NYT

Missing $1.4 Million Painting Found Hanging in Some Dude’s Bathroom — NYMag

Banker gaffe: “Give us a set of rules and then we’ll figure out how to work round them. I mean, work with them.” — Euromoney

Profile of Jack Shafer, who joyfully rips apart trend stories — Poynter

The Fed, Translated Into English — NPR

Be afraid: 32% of the 2010 class of Harvard Business School graduates have found work on Wall Street — Crain’s

Todd Henderson quits the blogosphere — TotM

Agassi:Sampras::Lennon:McCartney? Really? — Kottke

Comments
4 comments so far | RSS Comments RSS

‘Todd Henderson quits the blogosphere…’

Well, with a preemie baby at home he has had little sleep and that can create havoc and make a man say things he means, but didn’t mean to say… out loud.

The lion had no roar.

Posted by hsvkitty | Report as abusive
 

Todd Henderson should have said:

“It’s my money. I earned it. I worked really hard. I did a lot of things for a lot of people to get that money. I am exhausted from my hard work and I want to give my kids a nice life. Go out and earn your own money. I will be happy to give you my money in exchange for services, the same way I got my money. Here is a list of services I am in the market for. Provide them and you can have my money.”

Posted by DanHess | Report as abusive
 

DanHess, the central problem is that the services have ALREADY been provided. The government has spent and promised large amounts of money that it doesn’t have. Most recently, the Bush tax cuts were never paid for — they were passed straight through into the national debt.

Now somebody has to pay for those services, pay WITHOUT expecting additional services in return. Americans hate that! They would much rather receive services without paying, as they have over the last 30 years.

Under the present system, the effective marginal tax rate on wages (state, federal, Social Security, and Medicare combined) hovers in the 35% to 50% range beginning well below the $50k median household income and continuing up to the Todd Henderson level. My own marginal tax rate is almost identical to that of the Henderson’s, despite more than a two-fold difference in income. It effectively is no longer a progressive taxation system. It is closer to being a flat tax with a large fixed rebate (thus we might as well toss the tax code and re-write it that way).

If the Bush tax cuts are allowed to fully expire, the system will return to being mildly progressive. Fewer tax credits at the bottom and a slightly higher rate at the top. Seems fair to me?

But ultimately, the fundamental question is whether investment income from equity investments should be taxed preferentially to wage income. As it stands, the wealthiest members of our society (e.g. Gates and Buffett) pay the lowest marginal tax rate on the bulk of their income, and have an overall tax burden that (on a percentage basis) is lower than that of any above-median working household. That is clearly good for anybody who invests directly in the stock market, but is it fair?

Posted by TFF | Report as abusive
 

This blog post isn’t precisely what I was looking for, but with slight differences in the calculation it ultimately reaches the same point:

http://mises.org/daily/3822

Posted by TFF | Report as abusive
 

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