Your Taxes Are Too Low

Even if you make less than $400,000. I'm sorry, but they are. Also: Why you need a shrink, not an economist, to explain the current labor shortage.

I’m resuming my previous practice of pushing my New Republic pieces on Backbencher, on the theory that if you cared enough to have Backbencher delivered to your inbox (which hasn’t happened much lately) you might want to read what I’m furnishing these days to paying customers.

My latest piece excoriates the Democrats (mainly Sen. Kyrsten Sinema) for blocking the path to raising top marginal rates on personal and corporate income and on capital gains. The erosion of progressivity in the U.S. tax system is perhaps this country’s biggest domestic-policy failure of the past half century. Even if we weren’t to pass Biden’s Build Back Better spending plan, now reduced from $3.5 trillion to $2 trillion, we’d want to raise taxes anyway to start paying down the $3 trillion deficit we racked up already. I know Paul Krugman doesn’t think so, but I disagree. In addition to my old-fashioned concern about insolvency, the halving of corporate and capital gains rates has been a significant contributor to income inequality. Here’s my story.

On Wednesday I explained why it took me so long to figure out what was happening in the labor market. I was wasting my time talking to economists when I should have been talking to a shrink. Not just any shrink, but Anthony Klotz of Texas A&M’s Mays Business School. Klotz, who coined the phrase “the Great Resignation,” has an explanation for why the “quits rate” is higher than it’s been in 20 years that isn’t economic but psychological. Which makes sense, given that the Great Resignation is a global phenomenon that’s driving us all batty. Here’s that piece.