Sunday, March 13, 2011

Weekend round up: Lewis on currency boards; Danker on Utah's hard money legislation; Mitchell opposes raising taxes to lower the deficit.

From Forbes, Nathan Lewis argues that a currency board system tied to a specific gold price would fix the dollar.

Also at Forbes, Rich Danker
suggests Utah’s bill to make gold and silver legal tender is the first tangible evidence of a populist revolt against Washington's weak dollar policy.

On The Kudlow Report, Stephen Moore
discusses high oil prices:

At Forbes, Bill Flax links high oil prices to the weak dollar.

From New World Economics, Nathan Lewis
continues his analysis of bank reserves.

Cato’s Dan Mitchell
supports Grover Norquist’s argument that higher taxes will not lower the deficit.

At Heritage, David Weinberger
cites Alan Reynolds on income inequality:

First, as Reynolds points out, shifting tax rates have influenced how income has been reported to the IRS. For example, after individual tax rate reductions throughout the 80s and 2000s, businesses shifted from corporate tax returns to individual tax returns, since they would pay less in taxes shifting income to the lower individual rate. This resulted in increased reported income at the top, when in reality there was a lot of income shifting – though not necessarily gaining – which Reynolds found to account for “more than half of the
apparent increase in the top 1 percent’s income share since 1986.”

Second, Reynolds argues that the Piketty-Saez tax return study excludes many transfer payments for low-income families, because these payments don’t show up in IRS data. These include things like Social Security, Medicare, food stamps and other lower-income subsidies. Excluding these payments shrinks the percentage of total income for lower income groups, making it appear to expand the percentage of total income top earners collect. Of course, employer health care contributions, which tend to favor upper-income earners and therefore offset some of the transfer payments to lower-income individuals, also need to be taken into account. But overall, middle- and lower-income earners receive
more subsidies than upper-income earners.

Third, tax rates also affect capital gains realizations. Prior to the 1987 capital gains tax increase, capital gains accounted for “18 percent or less of all the broadly defined income reported on the top 1 percent of individual income tax returns in the early 1980s,” according to Reynolds. However, starting in 1987, capital gains realizations as a share of the top 1 percent of incomes dropped to an average of 7.3 percent for the next decade.

From Cato, Robert F. Mullgan reports the institute's William Niskanen is working to rehabilitate the Phillips Curve.

On Forbes, Reuven Brenner suggests government art subsidies weaken the culture.

At Fiscal Times, Bruce Bartlett reviews Douglas Irwin’s Peddling Protectionism on the Smoot-Hawley tariff.

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