We are the freak show
The press tends to treat foreign countries as a sort of “freak show.” “Look at all the bizarre things going on in China!” Or Japan, or Saudi Arabia, or Zimbabwe, or Turkmenistan.
But they have a blind spot for bizarre activities closer to home. Imagine a country where:
1. Gambling is illegal in many states, because it’s harmful, and yet the government of most of those states run enormous numbers rackets.
2. Prostitution is illegal, allegedly because it exploits women. But the police then imprison the victim and let the villains go scot-free.
3. The public is so horrified by the thought of people getting high that they imprison hundreds of thousands of drug users, but then turn around and elect three consecutive former dope-smokers as president.
4. A 20 year old soldier who has returned from Afghanistan cannot legally walk into a bar and drink a 3% alcohol beer. A couple of 20 year olds can’t legally drink a glass of champaign at their wedding. But a 16 year old boy can legally drive a 2 ton SUV down the highway at 110 kilometers per hour.
5. Many people have to pay stiff penalties for being married, sometimes as much as $10,000 per year. But the penalties don’t apply to people “living in sin.” Or gay married people in 2010, 2011, 2012.
6. Landlords face severe penalties for renting apartments with lead paint to families with children, yet neighbors in single family homes face no penalty for raising their own kids in a high lead environment.
7. Farmers are paid to not grow food.
8. Unlicensed economists are allowed to run the central bank, and yet you need a license to be an interior designer or a hair dresser.
9. One of the two major parties thinks monetary policy is wildly inflationary, despite the fact that inflation is running at the lowest level in decades.
10. And it’s a country where most economists don’t know how to debase a fiat currency.
Americans should take heart from the fact that all countries are freak shows. But people generally can only see the freakishness of other places, not their own.
PS. Of course no one can compete with this country.
Tags:
15. December 2013 at 15:45
Only two consecutive Presidents, since Bill Clinton didn’t inhale!
15. December 2013 at 16:24
Great stuff…a friend who worked at the old national UPI desk said, “Murders in California are always ‘bizarre.’ In New York, always ‘vicious.’ And in Texas they are ‘brutal.’ But if they happen in your hometown, they are ‘appalling.'”
15. December 2013 at 16:49
11. We would be kidnapped and thrown into a cage to be sexually assaulted, if we do nothing but peacefully choose to opt out of the central bank hegemony, which entails peacefully refusing to accept dollars for any of our transactions, including transactions to acquire dollars to pay “taxes.”
Of course, the freak shows on this blog advocate such freak show behavior, because if they didn’t, their whole intellectual investment and career would be jeopardized.
15. December 2013 at 17:48
W should never have let the freaks take over the monetary system. Free banking looks better to me.
15. December 2013 at 17:48
“Farmers are paid to not grow food.”
I remember the 80s when the American press consistently beat up Japan over its screwy agricultural subsidies while saying nothing about ours. As an American, I am more concerned about our ag subsidies than Japan’s.
15. December 2013 at 18:43
They shot the Excellent Horse-Like Lady? No!!!
15. December 2013 at 18:44
Floccina:
“W[e] should never have let the freaks take over the monetary system. Free banking looks better to me.”
Agreed. Milton Friedman once said that money is much too important to be left to central bankers. He said in his later life that the Fed should be abolished.
15. December 2013 at 22:48
“a country where most economists don’t know how to debase a fiat currency.” I’ve certainly come across numerous articles by leading economists (e.g. Rogoff and Reinhart) which don’t seem to understand that a deficit can (as Keynes pointed out) accumulate not just as debt, but also as monetary base. And of course if that goes too far, the result is “debasement”.
15. December 2013 at 23:00
“10. And it’s a country where most economists don’t know how to debase a fiat currency.”
That’s a good ignorance for central bankers to have. Very much like it’s a good ignorance for thieves to not know how to steal very well.
15. December 2013 at 23:57
Two quibbles:
“7. Farmers are paid to not grow food.”
Should be:
Drivers are legally required to BURN food.
AND
“9. One of the two major parties thinks monetary policy is wildly inflationary, despite the fact that inflation is running at the lowest level in decades.
10. And it’s a country where most economists don’t know how to debase a fiat currency.”
Should be:
10. And the other major political party insists it isn’t possible to debase a fiat currency.
16. December 2013 at 03:44
Let’s not forget
11. A country where a government body that regulates food and medicine warns a genetic research company that the saliva receptacles (aka “cups”) they let people use for said research are “medical devices,” and thus the company is running afoul of government regs.
(Perhaps I need to call the FDA and make sure that I’m not running afoul of any regs when I discard my used condoms)
16. December 2013 at 04:31
Geoff,
I appreciate that having central bankers and senior economists who don’t know how to debase the currency has it’s merits: i.e. they won’t debase the currency. On the other hand if they haven’t worked out something that Robert Mugabwe with zero qualifications in economics has managed, that suggests truly appalling levels of ignorance in the economics profession. That’s why I entitled a post on my own blog a few months ago: “Robert Mugabe should be in charge of economics at Harvard”.
16. December 2013 at 04:51
BTW, I thought Scott Sumner was a Yankee, but evidently he secretly grew up in Europe.
“But a 16 year old boy can legally drive a 2 ton SUV down the highway at 110 kilometers per hour.”
Kilometers?
Or was this clever subterfuge, to make us think Sumner was not describing America?
Actually, I think there are desert roads in Nevada and Utah where 80 mph is the limit, and if not that, then 75. (Actually, I just checked: There is a road in Texas on which 85 mph is legal (a toll road between Austin and San Antonio).
That works out to 137 kilometers per hour.
16. December 2013 at 04:58
An american in Croatia told me that alcohol in beer is limited to 2,5% in USA. is that true?
16. December 2013 at 05:40
Petar:
No, that is not true. Most beer has an alcohol content of 4-6%.
16. December 2013 at 05:41
Jon, yes but it tastes horrible compared to ours… 😛
16. December 2013 at 06:21
Everyone, And we think the Saudi’s are weird because they don’t let women drive!
16. December 2013 at 10:14
#4 Kilometers? What country are you living in!
#5 the marriage penalty is only a penalty if both partners contribute nearly equal incomes. It is a break if one partner does not work.
16. December 2013 at 10:58
Great list, except for the marriage penalty, which you surely know is both unintentional and not universal. To quote http://vpostrel.com/articles/marriage-penalty-taxes-women-for-working
How did marriage and taxes form their unholy union? As public-finance economists point out, most Americans want the tax system to do three things: to be progressive, to treat households with the same incomes equally, and to treat all individuals with the same incomes equally, whether or not they’re married.
The problem is, we can have any two of those things at the same time, but not all three. No matter how often politicians and various interest groups suggest otherwise, no technical fix can eliminate the marriage penalty while preserving progressive taxation and “horizontal equity.”
16. December 2013 at 11:09
Doug, That descibes me and my wife, unfortunately.
Virginia, An honor to get a comment from you. A couple observations:
1. The highly egalitarian Swedes treat each taxpayer as a individual, so it’s not clear why we could not do the same. If you are right that the system reflects our values, then consider this post a critique of those values.
2. It’s not clear what marriage has to do with the argument you present. Why aren’t adults who live together in an unmarried relationship also required to file jointly, or pay a penalty? You say this is a dilemma because it reflects society’s values on several issues, but does society really believe that married households with two professionals should pay higher taxes than unmarried households with two professionals?
16. December 2013 at 13:38
The highly egalitarian Swedes treat each taxpayer as a individual, so it’s not clear why we could not do the same.
Of course we could do the same, it’s a choice of politics.
The political fulcrum point is that it is cheaper for multiple adults to live together in single household (the Census estimates per person living costs at the square root of the number of people.)
Thus two adults living together on $80k income are materially better off than one person living alone on $40k income. The principles of progressive taxation demand that their income be taxed at a higher rate — so two married persons each earning $40k pay a higher tax rate than one single person earning $40k, the better off household pays a higher tax rate as a matter of progressive fairness.
OTOH, this results in one individual with $40k of income paying a higher/lower tax rate than another. To eliminate that unfairness, inequality, and eliminate perverse incentives (tax reasons to marry, divorce, and time each) equal taxation of all individuals is necessary. But this type of fairness results in the unfairness of better off households paying lower tax rates.
The conflict between treating individuals equally and progressive taxation of households is arithmetically irresolvable — pick your unfairness! — so the resolution is always a kludge-of-the-moment via the political fulcrum (which has swung to greatly reduce the marriage penalty in recent years, as a result of the growing number of two-earner couples and their rising voting power).
Why aren’t adults who live together in an unmarried relationship also required to file jointly, or pay a penalty?
What kind of police force would one need to hire, how large and with what powers, to enforce *that*?
Tax laws must be *practical* to work. Marital status is simple, you declare yourself legally married or not. Done.
OTOH, imagine trying to determine whether tens of millions of people wer three years previously (the tax audit period) actually living together or just spending time together, and for how much of that year. When they all have a monetary reason to deny it. Good luck with that!
The world of tax “reform” proposals is full of ideas that sound wonderful in principle but which are totally impossible in practice (from Georgist land taxes to sales taxes/VATs that are supposed to collect 20% of GDP, and onward…)
Of course, the world is full of economic reform proposals of all kinds that sound great in principle but blow up in practice — but the blow-ups happen really fast and obvious with taxes.
does society really believe that married households with two professionals should pay higher taxes than unmarried households with two professionals?
Well, yeah. That’s why instead of just having “single” and “joint” tax rates and rules, there are also separate ones for “married filing separately” (basically still married but not living together) and “head of household” (unmarried but with a household) — with not a few terms that are quite punitive compared those for single and joint. They all have very long legislative histories of being managed by congress-critters who get re-elected by delivering what society wants.
Remember, what society wants is not internally consistent (and has a lot more faults than that).
16. December 2013 at 15:19
Corporations get to deduct expenses fromtheir tax bills. So they deduct things like paying for lap dances at high end strip clubs, but the working middle class cannot deduct expenses for things like groceries bill for feeding their family or tution checks to educate their kids.
16. December 2013 at 15:24
Let me put the “marriage penalty problem” more clearly, with a little bit of history to illustrate:
It is impossible to treat individuals equally, *and* treat families equally, with a progressive income tax. Thus, with a progressive income tax, unequal tax treatment of either individuals or families is forced. Politics ensues.
Say two individuals with income of $50k each marry, as do another two individuals with income of $100k and $0. With…
[] Individual-based taxation, the first two individuals each pay the same tax as that paid by any third person with $50k income, which is certainly “fair” on an individual basis.
But the second *family* pays much more tax than the first. This is because the last half of the individual-based $100k of income piles up into much higher tax brackets than the two $50k-incomes ever reach. (Each $50k of income starts at tax rate zero, but income dollar number $50k+ 1 starts being taxed at a rate above that paid on $50k, and the tax on that income goes ever higher from there.)
Making one family pay so much more tax than another on the same income is unfair! Individual-based taxation thus is unfair.
Family income tax rates should be equalized!
[] With family-based taxation the two families pay the same tax. But now individuals pay different tax rates on the same income — tax rates must be changed to *reduce* the tax paid on the one family member’s $100k of income to no more than the tax paid on the other couple’s two times $50k of income. (Simplest way: income splitting — let couples divide all their income between them then pay single rates on each).
But, wow! Now just by getting married I can slash my tax bill (if I marry someone with little or no income) — and likely by half or more!! And this when I’m also slashing my personal living costs by sharing space with another. Great deal for me!
But singles object: That person with $100k of income shouldn’t be able to slash his tax bill to our $50k level, just by getting a marriage license — paying no more tax than we do on twice our income! Unfair! Unfair!
Tax rates shouldn’t be cut by half simply by marrying. That’s totally unfair to those who can’t get anyone to marry them. Thus, Congress must increase the tax rates paid by marrieds to *above* the “income-splitting” level, above the individual-based tax rates. And when it does, the result is…
[] Two persons who both have income are returned to having their income added up as a single taxpayer, so if they both have $50k of income the second again “piles up” on the first to be taxed at higher rates. But now newly created “joint income” tax bracket rates apply, and these are lower than in the original case.
The result is the current “marriage penalty”, an intermediate between the first two cases.
The US Tax Code has in fact moved through all three stages: Originally it was an individual-based tax with marital status disregarded, then in the 1940s it became a “married couples income split” tax, then after the first two stages proved politically unsustainable it became the current whatever-it-is.
IOW, among the options “progressive tax, individuals treated equally, families treated equally”, one can pick two of three — but Americans want all three so we pick option four: Kludge.
PS: Note that if you are one member of a two-equally-earning married couple, and want to get rid of the marriage penalty you pay by moving to an individual-based tax system, your are arguing that some other family that has the same income as yours should pay a much *higher* tax bill on the same income just because it is all earned by one person instead of two.
What’s fair about that, so much more tax on the same income?? You may think that’s fair, but they probably won’t — and they have a Congressman too! (Which is where “kludges” come from.)
17. December 2013 at 03:05
the thing that makes me really think you’re a nation of freaks is how (a subset of you) work so hard (long hours) and have jobs with so little paid holiday, and completely believe this is a good or superior way to live. You’re rich: buy a little more leisure and time with your families, you lunatics.
17. December 2013 at 06:31
Gabe, Good one.
Jim Glass. Obviously I understand the dilemma you pose, I’ve done previous posts on this. But your defense is simply wrong. You say:
“Thus two adults living together on $80k income are materially better off than one person living alone on $40k income.”
That’s obviously false, or else people would not choose to live alone. Sometimes two unmarried people making $40,000/year share an apartment. Sometimes they live alone. If the ones sharing were better off then obviously the others should share as well. But they don’t. Revealed preference. I was single and lived alone. Had I shared an apartment I would have been worse off.
Your basic argument boils down to “People who live on dog food should have to pay a higher tax rate (putting aside enforcement issues) because it’s cheaper.” Do you really believe that? If not, you shouldn’t believe that one’s housing decisions should enter into the tax rate calculation.
Even worse, a family with one person making $160,000 vs. is far better off than a family with two people each making $80,000, yet your proposal would treat them equally for tax purposes. That makes no sense.
Luis, Good point.
17. December 2013 at 09:05
The author of this list is a complete douchebag.
17. December 2013 at 12:16
First, it’s a good list.
You can treat each taxpayer as an individual, but you do get into all the fun shenanigans when you allow itemized deductions that can’t easily be associated with just one person. You’ll obviously get different results depending on who has the deduction, so the same number of deductions and total income will lead to very different results.
Now, I am in no way saying that the current US system is any good, but that all but the simplest of systems can, and will be gamed. Even if we ignored the income tax altogether, and ran a high VAT, we’d still have ways to game the system, just like any self employed person in the EU does.
In the end, it’s all issue of principles of who we want taxed. Good luck getting an agreement on that, other than ‘tax other people, but not me’
17. December 2013 at 20:38
Your basic argument boils down to “People who live on dog food should have to pay a higher tax rate (putting aside enforcement issues) because it’s cheaper.” Do you really believe that?
“People who live on dog food” arguments? Like from all those paleo-liberals marching against the meekest of Social Security reforms?
C’mon, please…. 🙂
18. December 2013 at 05:33
7. Farmers are paid to not grow food.
7.b We call that food.
18. December 2013 at 07:30
Bob, Replace the income tax with a payroll tax with no deductions. Yes, all tax regimes have problems, but some have far more than others.
8. September 2015 at 10:33
actually the data on not letting under 21 drink is pretty solid. Its almost entirely related to DUI and risks of death from that behavior. Under 21 is very high risks drivers when impaired.
Though your point makes a little sense since you compare it to driving.