Of course Warren Buffet's op-ed in Sunday's New York Times caused a lot of brouhaha. I tend to be surprised at how charged the debate about taxing the very richest income strata gets. Buffett is not talking about the rich in the sense that Obama has talked about them, i.e. anyone making more than $250,000 per year. While $250,000 is a lot it is not totally unheard of. A lawyer, accountant, doctor, financial analyst, consultant at an advanced point in a successful career could well make that much money. Making $1 million every year is a different league. The majority of us don't know anyone making that much money. Yet I know many people who get upset at the proposal. It can't be a matter of self-interest that makes people feel this way so it must be a matter of principle. Yet the degree to which people feel this way seems incommensurate with other matters of principle. Whether it is incommensurate or not, here's why you would want a progressive tax system:
Tuesday, August 16, 2011
A Capitalist Case for a Progressive Tax System
Of course Warren Buffet's op-ed in Sunday's New York Times caused a lot of brouhaha. I tend to be surprised at how charged the debate about taxing the very richest income strata gets. Buffett is not talking about the rich in the sense that Obama has talked about them, i.e. anyone making more than $250,000 per year. While $250,000 is a lot it is not totally unheard of. A lawyer, accountant, doctor, financial analyst, consultant at an advanced point in a successful career could well make that much money. Making $1 million every year is a different league. The majority of us don't know anyone making that much money. Yet I know many people who get upset at the proposal. It can't be a matter of self-interest that makes people feel this way so it must be a matter of principle. Yet the degree to which people feel this way seems incommensurate with other matters of principle. Whether it is incommensurate or not, here's why you would want a progressive tax system:
Monday, August 15, 2011
Turning Japanese...
...I think I'm turning Japanese, I really think so.
Below is a chart of the MSCI Japan and the MSCI US Indices except for lagging the US by 11 years.
It's striking of well the general shape of these two indices matches up. Could it be that the US is about to repeat the history of Japan? The chart gives a bit of a roadmap where the US equity market might head. In 1993 Japan found itself with a stagnating economy that forced it to cut interest rates eventually close to zero and keep them there for the next two decades (unless something changes drastically in the next two years.) Zombie banks were stalking the land and debt reached new highs.
Below is a chart of the MSCI Japan and the MSCI US Indices except for lagging the US by 11 years.
It's striking of well the general shape of these two indices matches up. Could it be that the US is about to repeat the history of Japan? The chart gives a bit of a roadmap where the US equity market might head. In 1993 Japan found itself with a stagnating economy that forced it to cut interest rates eventually close to zero and keep them there for the next two decades (unless something changes drastically in the next two years.) Zombie banks were stalking the land and debt reached new highs.
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