Lean Government

The strange research of John Bates Clarck medal winner Emmanuel Saez

The case for higher taxes is based on the (false) assumption that the top tax payers in the US have more than doubled their share of income since 1980. The statistics is from the research of John Bates Clarck medal winner Emmanuel Saez with Thomas Piketty.

He has made has made his research available to the general public in his article Striking it Richer:The Evolution of Top Incomes in the United States. He claims that the top tax payers income has gone up dramatically, doubled. However if you scrutinize his research as Alan Reynolds has in WSJ article The Top 1%…of What? You find that the effect is imaginary, only an effect of changes in tax law, the actual underlying income is the same since 1980. Instead of having corporate income business owners changed the status of the corporations from C-corp to S-corp status. income reported as corporate income no was reported as individual income, however the total sum of income is the same. See Piketty/Saez rebuttal, extremely weak in my opinion.

To try to legitimize income redistribution with research is  in my opinion necessary but to try to do it with misleading research is dishonest, it is much more fair to use pure ideological arguments of class warfare. But unfortunately the American people does not support income redistribution unless you can substantiate it.

If Saez won the John Bates Clarck medal for this, his research one must wonder what the prize committee was thinking? Political maybe or just populist as was the Nobel Committees selection of Paul Krugman, a brilliant economist but a populist and biased partisan propagandist.

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April 27, 2009 - Posted by | Uncategorized

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