Ken's Project Blog

March 3, 2011

Michael Moore on Wealthy People’s Money

Filed under: In The News,Politics,Uncategorized — Ken @ 2:00 pm


In the above video, Michael Moore bloviates on the need to take increasing amounts of money from the rich because it’s “ours.”

From the video:

“I think we need to go back to taxing these people at the proper rates. They need to — we need to see these jobs as something we some, that we collectively own as Americans and you can’t just steal our jobs and take them someplace else”

Sounds nice doesn’t it – just increase taxes on the “rich” (ostensibly the proverbial “other guy,” not us) and then we can solve all “our” problems. Let me introduce you to Hauser’s Law, as articulated in a November, 2010 Op-ed piece in the Wall Street Journal:

Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90). This observation was first reported in an op-ed I wrote for this newspaper in March 1993.

For those that are more visual, I provide the following graphic – notice how the fluctuations in the “Top Marginal Rate” have almost no effect on the total revenue collected (as a percentage of GDP) after the mid-1940s:

If you’d like to see the raw data used to create the above chart, here are the data sources:

The best way to grow tax revenues and help pay for all the things Government does is to raise the G.D.P., not simply raise the top marginal tax rate, it would seem.

Note: For an interesting decomposition of the so-called Hauser’s Law, take a look at this write-up “Hauser’s Law is Extremely Misleading” by Mike Kimel at Presimetrics.com.

Sources:

Real Clear Politics: Moore On Wealthy People’s Money: “That’s Not Theirs, That’s A National Resource, It’s Ours”

Wall Street Journal: There’s No Escaping Hauser’s Law

IRS.gov: Top Marginal Rates Historical Table 23

Census.gov: Federal Revenue 1930-2002 from US Statistical Abstract, Historical Statistics and Federal Revenue 2003-07 from US Statistical Abstract, Table 451

Presimetrics.com: Hauser’s Law is Extremely Misleading

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