Ignore corporate whining

Joe Biden is proposing to finance his badly needed infrastructure program by raising corporate taxes. Business mostly likes the infrastructure program—everything works better when the basics aren’t falling apart—but it doesn’t want to pay for it. Nobody likes paying taxes (well, maybe some oddballs do, but to each their own), but over the last few years, Corporate America has been enjoying the lightest tax burden in history. That needs to change. Graphed below is the effective tax rate—the share of income that’s paid in tax, not the rate that’s on the books,… Read More

Explaining the rot

In my article about fighting the coronavirus and economic crises yesterday, I said: We also need to invest in the physical and social infrastructure of this country. For decades, civilian public investment net of depreciation has hovered just above 0, meaning that we’re doing little better than replacing things as they decay. Here’s some more detail on that, which updates a September 2017 post. Graphed below are histories of net public investment in the US, from the national income accounts. (The source is table 5.2.5, here.) “Net” means after accounting for depreciation, aka… Read More

Why UI isn’t enough

I’m going to be posting a series of commentaries on the current crisis. Here’s a quick first It’s odd to see Democrats like Pelosi and Schumer objecting to Republican schemes to send everyone a check for $1,000, maybe two. Of course, one- or two-off checks for $1,000 won’t pay many of the the bills for very long. But talk of means-testing right now looks mean, cheap, and politically suicidal. Schumer says that rather than write checks, we should expand unemployment insurance (UI) benefits. It would have to be some expansion. Benefits are low,… Read More

Taxing the rich is only a start, though it’s a good one

It’s become near-consensus on the social democratic left that you can fund a decent welfare state by taxing the rich and shrinking the military. Sad to say that isn’t true. Those are good things in themselves, and you could pay for some excellent things with that agenda, but it would still be well short of actual social democracy. I’m defining social democracy as a large and robust welfare state that socializes a lot of consumption through taxation and spending, compressing the income distribution, reducing poverty sharply, capping the political power of the… Read More