Saturday, September 8, 2007

Flat Tax Fallacies

Some time back, I watched a remarkable two hour PBS overview of the first two hundred years of the US Supreme Court:

http://www.pbs.org/wnet/supremecourt/

The entire two hours was engrossing. Among other things, it reinforced my view that the greatest achievement of the George W Bush Presidency is his appointment of John Roberts as Chief Justice. What a remarkably worthy and wise appointment. I was impressed by the testimony and remarks of Roberts during his confirmation hearings. His remarks regarding the history of the Court on the PBS special are even more impressive.

I was particularly struck by two topics during the telecast. The first was the paradox that the ceaseless debate about the Constitution being a "living" vs "set in stone" document had its origins in the most important decision the Court ever made, the Marbury vs Madison case which established the authority of the Court to review and overturn the laws of Congress out of vapors as thin as those used to establish the so-called Right to Privacy which led directly to Roe vs Wade. The delicious paradox is that the (only implied) authority for Judicial Review was first used to strike down a law of Congress which conflicted with a strict constructionist view of the Constitution. And we've been stuck (or blessed) with the fallout from this paradox ever since.

The second thought provoking topic was presented only as background for a description of some interesting Court history, but the topic itself has great contemporary importance.

It had to do with the origin of the Federal Income Tax and its birth as a reaction to the perceived excesses of the so-called "Robber Barons" (Rockefellers, Carneghies, etc.).

Basically, the tax was imposed as an effort to redistribute wealth.

For two opposite views on the merits of government-engineered wealth redistribution, I recommend the following executive summaries (the first by a "progressive" labor movement journalist and the second by Milton Friedman):

http://www.unlockyourlife.com/pizzigati.html

(Note in the above that FDR proposed a 100% tax on incomes above a certain level!).

http://www.freetochoose.net/article_2a.html

I come down somewhere in the middle. The problem with the absence of a progressive tax is that it leads to enormous disparities in wealth distribution, which are at first tolerated but which inevitably lead to class warfare of the type which we are beginning to see here in California, where Exhibit A is the (horrible) "millionaire's tax," the Proposition 63 voters' decision to fund mental health treatment with tax revenues exclusively collected from said millionaires.

Here's the California state web site that reports on the status of the program established by Prop 63:

http://www.dmh.cahwnet.gov/mhsa/default.asp

The "millionaire's tax" for the mental health program is the sort of micromanagement populism which will become more and more prevalent as the rich vs middle class gap persists and widens.

I'm not a fan of government management, but I am approving of government regulation. As a sports fan, I know that players adapt to all manner of rules and regulations and still play their hearts out, as long as the competition is judged to be fair and to give all players an equal sporting chance at success. The most destructive type of regulation is not excessive regulation but unequal regulation or inconsistently enforced regulation.

Even Friedman (above) argues that the Depression occurred more because of incompetent regulation than from the regulation itself.

In sport, an important goal of regulation is to maintain a competitive (if not completely level) playing field. Thus, there are weight divisions in boxing, three points for long baskets made by short players, prohibitions against doping in general, and many other highly restrictive rules.

If restrictions and rules themselves were an impediment to vigorous competition, we'd have no one trying to win the game. The idea that lots of regulations in and of themselves stifle the economy is as silly as saying that rigid and "oppressive" rules in sport stifle competition. Quite the contrary, good rules make for good competition, which is the essence of sport and the essence of a market economy.

The progressive tax is just one other rule of the game. You are "allowed" to make your first 10,000 dollars with little "impediment." As you make more and more, it becomes more challenging. Sort of like a computer game where it becomes progressively more challenging at the higher levels.

With a flat tax, the more wealth (and, with it, power) one accumulates, the easier it becomes to compete and, thus, the disparity between the ultra-rich and middle class begins to grow exponentially. The data described by the labor movement journalist (linked above) make this clear.

For a number of compelling reasons, a progressive tax makes for a better game. Which means a better economy.

Racism and Affirmative Action

In a recent political debate, I got into a bit of a dispute about racism. I noted that half of the white voters in the state of Alabama voted (in the November, 2000 general election) against the repeal of a law holding that it was illegal for whites to marry blacks. I further offered my opinion that the reason the South flipped from being solidly Democratic to solidly Republican was most prominently because of racism.

What exactly is racism? Which of the following people are racists:

1. White people who dislike or even hate black people, as a group?
2. White people who think black people are, on average, less intelligent?
3. White people who think that black people are so different from white people that they are, in effect, a differerent species of human?

While pondering the above, I happened to watch the Dennis Rodman reality TV show on HDNET: Geek to Freak. Basically, the show takes geeky white nerds and gives them a makeover as hip hop "artists." The show is worth watching if you enjoy watching whites trying to act black (hint: they aren't very good at it; even the professional white rappers who do the teaching). The other attraction of the show is figuring out how Rodman continues to look so good, despite a lifetime of burning his candle at both ends).

Here's an interesting article:

http://www.villagevoice.com/music/0...a,65332,22.html

It talks about how hip hop has basically been taken over by whites. Even this has a racist element to it. The largely white audience tends to prefer white rappers because they write more "intelligent" lyrics. An interesting side note, however, is that the most successful white rappers are those who's artistry has been validated through commercial sales to blacks. It's basically come down to blacks being increasingly relegated to the role of being a focus group for the whites who dominate the economic part of the genre and increasingly are beginning to dominate the talent part of the genre.

Another recent story in the news was in yesterday's Orange County Register (our local newspaper).

http://www.ocregister.com/ocregiste...cle_1795098.php

It was about area high school students who are participating in highly competitive program in which they are doing original cancer research in the laboratories of prominent University of California Irvine professors. Here are this year's participants, all of whom expressed a desire to go on to a career in medicine or science research:

Fellowship students

Tiffany Chiu, Villa Park High
Janice Cho, Los Alamitos High
Sean Cray, Los Alamitos High
Tiffany Hsu, University High in Irvine
Yu-Chih Hung, University High
Megan Kanne, O.C. High School of the Arts in Santa Ana
Candice Kwark, Northwood High in Irvine
Ann Lin, Irvine High
Grace Ma, University High
Sarah Park, Sunny Hills High in Fullerton
Brian Peng, Irvine High
Jane Seo, Irvine High
Andy Shih, Irvine High
Kanan Sundhu, University High

It does bring to mind William Shockley's protests that he wasn't a white supremicist, because, even though Shockley believed blacks to be academically inferior; so did Shockley believe Asians to be academically superior.

Finally, there is this interesting excerpt from a very interesting book, published in the Atlantic shortly after the human genome was sequenced:

http://www.mywire.com/pubs/TheAtlan...10037&oliID=229



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More than I0,000 years ago, on the frigid, wind-swept plains of northeastern Siberia, a genetic accident occurred in a testicle of a particular man. As one of the male’s sperm cells divided, the Y chromosome in the cell underwent a copying error. One of the chemical units making up his DNA changed from a molecule called cytosine to one called thymine. An elaborate biochemical proofreading apparatus is supposed to correct such copying errors, which geneticists call mutations. But there are so any individual chemical units, or nucleotides, in human DNA-about 60 million in the Y chromosome, and about three billion in the other chromosomes in a human sperm or egg cell-that a few mutations inevitably creep in every time a cell divides. Within the next couple of months the man impregnated a woman. The sperm cell I that combined with her egg was te one with the mutated Y. The woman gave birth to a son, each of whose cells had the mutated Y he got from his father. The son was no different from the other men in his tribe (the mutation in his Y had no effect on his body), yet he was a very pivotal figure in human genetic history.

At some point, according to one interpretation of events, the son of the man whose Y had mutated crossed what was then a broad plain leading from Asia to North America--presumably with a small baud of others. Before him stretched a continent that was largely, or perhaps completely devoid of human beings. This man had sons himself, and his sons had sons. Over subsequent centuries his descendants spread down the length of North America, across the Isthmus of Panama, and into South America. All of them carried their forebear’s distinctive Y chromosome, to which they added their own mutations. Today more than half of Native American males have this imitated Y chromosome.

Genetic reconstructions of historical events can always be interpreted in somewhat different ways, observes Peter Underhill, the geneticist in Cavalhi-Sforza’s lab who first detected this and many other variations in Y chromosomes. The mutation could have occurred in Siberia some generations before the migration along the Bering land bridge, or it could have occurred in North America. Nevertheless, we know that this man existed and that his Y chromosome differed from any previous Y chromosome in this way. His particular mutation could not have originated in more than one of the ancestors of today’s Native Americans, and the mutation occurred in to other group in the world. Yet DNA is such a long and complex molecule that every act of human procreation produces at least some unique mutations. These mutations spill across the generations like an unusually shaped jaw or distinctively colored eyes. The result is an elaborate human genealogy, an intricately branching tree of genetic alterations.
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All of the above, as well as various previous debates over affirmative action, got me thinking more seriously than I ever have before over the questions of (1) what is a racist [?] and (2) is affirmative action ever a positive thing [?].

More to follow.

- Larry Weisenthal