Kruse Kronicle

Kruse Kronicle Goes Viral

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by

mwkruse
in

To my regular readers, you should know that Kruse Kronicle went viral yesterday (at least by the Kronicler's standard) in response to my Taxing Questions post on Friday. First, Scot McKnight linked it on Saturday. That got some good discussion going. Next, Harvard economist Greg Mankiw stumbled upon my post, probably in response to the link I included to his post about the topic. He posted a link a little after 10 a.m. on Sunday. That got the hits rolling. Thirty minutes after that Pajamasmedia linked my post. Even more hits. Finally, at about 10 p.m. yesterday, Instapundit linked the post. I've had about as many hits this morning as I get in two weeks. I see others are linking as well. Thanks for the links.

I just want you to know I'm not letting all this go to my head. Should we meet in person, it will be sufficient to address me as "Oh Grand Pooh-Bah of the Blogosphere." Or you may use the shorter version, which is prompted by many of my posts, "Oh pooh." 🙂

Comments

6 responses to “Kruse Kronicle Goes Viral”

  1. Dana Ames Avatar
    Dana Ames

    Dear Pooh:
    Commenting where there is a clean slate…
    It’s clear to me that the whole tax code needs to be scrapped. It’s way too complicated, and there are too many (in my opinion) ways that the extremely wealthy (not your Taylor family, but those worth many times more) can avoid paying taxes altogether.
    A few months ago, someone wrote a letter to the SF Chronicle Business section describing a simple tax computation system that makes sense to me. It’s not strictly flat and it’s not strictly progressive. There are no deductions for anything, and no loopholes (no way, in other words, for legislators to have to be indebted to special interests). Nobody pays taxes until they reach an income level of $40,000 (in the letter writer’s example). After that, the gov’t takes 2%. So if a family’s income is $70,000, $40,000 is deducted and they pay 2% of $30,000, which is $600 (just under 1% of total income). This would theoretically allow people with lower incomes to save more of what they earn, which everybody agrees is a good thing. If the income is $10,000,000, subtract 40K and take 2% of the remainder, and it works out to be nearly $200,000 (closer to actually being 2% of total income). A significant chunk, but plenty left over for the extremely wealthy person to risk and invest. The letter writer said he thought 2% would cover the spending the gov’t does now, without the debt factored in, if I remember correctly. This would also enable the gov’t to plan spending better and get the doggone budget balanced.
    I’d be very happy to pay even 5% under this sort of system. The only reason I care about deductions now is that they enable me to get back my “enforced savings account” that has been withheld from my husband’s earnings and paid quarterly be me as a small business owner. (For the last four years our tax refund has gone straight to the finance office at our son’s university.) The complexity of what we do now is madness, and I think it is very frightening to the average person.
    Dana

    Reply
  2. Michael W. Kruse Avatar
    Michael W. Kruse

    Dana, what you’re describing sounds to me like various versions of the flat tax. Jack Kemp has always been a big backer of this. A threshold is set below which no taxes are owed and then a fixed percentage is taxed on each dollar after the threshold is met. Most of the former Soviet Republics have gone with a flat tax. (I believe Hong Kong and a few other places have it as well.) I do find it interesting that when these nations had a clean slate to pick an equitable system, that so many chose a flat tax. I personally lean this direction but there are complications no matter what we do. For one thing we would need to reinvent the Social Security as non-regressive tax proposition.
    Apart from the very costly efforts to comply with a complicated tax system, is the collusion it fosters between politicians and those with wealth. Tax code provisions become one more “product” politicians have that they can “sell” to the wealthy in exchange for contributions. Wealthy donors feel evermore compelled to be in the middle of the political process in order to protect their corporate interests or to gain advantage over their adversaries. I think a flat tax would drastically reduce much of this. Furthermore, the more people perceive a tax to be just and easy to comply with, the more voluntary compliance you will get, and I think likely more revenue than you might get with other strategies.
    The 2% sounds low to me. I think I’ve generally heard more like 10%. Whatever the case, I agree with you on the principle.
    (Hope San Diego was a good time!)

    Reply
  3. Dana Ames Avatar
    Dana Ames

    I like it when we agree, principled or not… 🙂
    San Diego was the best!
    D.

    Reply
  4. Peggy Avatar
    Peggy

    Dddear Pppooh,
    Lllove your wwwork.
    Your fffriend,
    Pppiglet

    Reply
  5. Michael W. Kruse Avatar
    Michael W. Kruse

    Dana
    Agree is good. 🙂 Glad SD was a good time.
    Peggy
    LOL. Oh bother. I laughed so hard I spilled all my honey and global warming killed the bees that make my honey. 🙂

    Reply
  6. Peggy Avatar
    Peggy

    Michael,
    Hehehe…only the sticky parts left, eh? ;^)

    Reply

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