Is the Threat of Crime a Reason to Redistribute Income?

Our tax system (over which I predict we will be having a large debate in the near future) is more or less a debate over two questions, one technocratic and the other values-based.

The technocratic question: what is the efficiency of various forms of taxation?

The values question: how and how much should we redistribute income?

The second question is nigh unanswerable– Rawlsians would say that income redistribution should be almost 100%.  Utilitarians (and most economists) would come up with utility functions for citizens and solve a Mirrleesian tax model.  Libertarians would say no income redistribution should be done at all, and that taxes should be levied on the basis of benefits received.

The first question however, has an answer, and it is that raising taxes on 1) individuals with high income, 2) individuals with already high marginal tax rates, and 3) savings, all do more harm to the economy than raising marginal taxes on the poor.  The poor do not change their behavior much in response to a tax increase, they’ve just got to soldier on.  High income earners, by contrast, will cut back their working hours and take more time to enjoy their earnings if you try to take a slice from them.

The evidence on this point seems pretty overwhelming– I’ve yet to see any analysis of the elasticity of taxable income that estimates the elasticity of high earners as less than that of low earners.

There are three typical responses given by liberals.

The first, which is reasonable, is that poor people deserve more income.  In other words, yes, progressive taxes reduce the economic pie… but it is worth some losses to cut the pie more evenly.

The second– which is deeply flawed but will not be discussed at length here– is that low taxes on the poor will increase demand, and thus drive the economy.  In other words, they believe that the Keynesian paradox of thrift– a theory developed to explain recessions– holds even during normal economic periods.  In short, the paradox of thrift is a temporary phenomenon, and thus can only serve as a temporary justification of policies.

The third, which is what I’d like to discuss a little and put to rest, is that we need to redistribute income, because if we don’t, poor people will commit crime or foment revolution or somesuch.  In other words, if you’re a rich person, and you don’t care about the poor, you should still pay more in taxes, because if you don’t, you’ll get robbed.

This argument defies comprehension for three reasons.

1)  It simply isn’t true.

Here, check for yourself:

http://en.wikipedia.org/wiki/Crime_in_the_United_States

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

Notice something?  Income inequality has been steadily rising since about 1970.  Over that same period, violent crime has fallen nearly in half.  A decade ago it might be possible to cherry pick data and come to the conclusion that income inequality fueled crime, but these days virtually any time series panel regression will show no positive relationship between the two variables.

2)  It’s hypocritical.

Every time there is a debate on an issue of national security, liberals tell us that Republicans are the party of fear, that they win elections by scaring voters and trumping up threats.  But who are the fear mongers?  “You better give money to the poor else they’ll mug you” is a threatening message.

3)  It’s poor politics.

If you’re going to convince people that the poor need our support, you’re not going to get very far by painting them as some sort of crime prone extortionists, ready to rob your grandmother if they don’t receive their monthly bribe from the government.  That’s exactly the sort of characterization that will compel people to avoid redistributive policies out of spite.

There’s plenty of room for debate on income redistribution.  But let’s not pretend that such a policy would be win-win.

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Blizzard 2010

After barreling its way up the East Coast, a snowstorm slammed the Boston area on Sunday night, producing blizzard conditions and closing the Institute to all non-essential personnel on Monday.  The storm dumped up to 18 inches of snow in some parts of Eastern Massachusetts, and gusts were recorded up to 60 mph, according to the Boston Globe.

Throughout the day on Monday, plows worked to clear roads and walkways around MIT, though strong winds continued to blow loose snow.  But those winds may have taken a greater toll than the snow itself.  The vehicle gate between the East Campus Courtyard and Ames St. was nearly torn completely off by its hinge.  And on Vassar St., a knocked-down traffic sign lay buried in the snow near Simmons.

Still, not everything ground to a halt. Some braved the winds on Monday to enjoy the snow in Killian Court.

The Institute will reopen at 11 p.m. on Monday for all third-shift employees.

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Sunday Foreign Edition

If I’m disciplined enough, every Sunday I’ll post a round-up of foreign pieces I found thought-provoking from the past week.  Here’s the first installment.

AFPAK

H.D.S. Greenway at the International Herald Tribune says we need to go softly-softly with Pakistan to get cooperation.

Michael Scheuer at The Diplomat, in a similar vein, does not like the U.S. foreign policy shift from Pakistan to India.

My own thoughts on the issue are already published.  I personally believe that India makes the better ally, and taking a hard line with Pakistan and demonstrating that we have other options for regional allies will make it clear that they either cooperate more closely or become isolated.

Gwynne Dyer at the Japan Times says Afghanistan is now a civil war.

Robert Blackwill at the Times of India lays out his case (for the nth time) on partitioning Afghanistan, a position I find seductive.

Finally, Foreign Policy has a year-end round-up of articles from its AfPak division that you might have missed.

IRAN

Meir Javedanfar at The Guardian says Iran’s decision to reform subsidies as part of its drive to scrape together more military funding will destabilize the regime.

Hamid Dabashi at CNN disagrees, saying the regime looks pretty stable, and politically, the move is likely to push the Greens back on their heels.

I’ve said it before and I’ll say it again: old men with guns beat young kids with ideas.  In theory, subsidy reform will improve the lot of Iranians AND free up more money for military buys, but even if it doesn’t, bet on the Revolutionary Guard to keep its grip on things.

NORTH KOREA

Edward Luttwak at Foreign Policy applauds Seoul’s tough line with North Korea, saying it will be a strong South Korean deterrent.

John Cushman at The Atlantic agrees, and says a U.S. deterrent is crucial to maintaining peace on the peninsula.

Andrei Lankov at the Financial Times is less confident, saying North Korea will strike again.

Bruce Klingner at the Los Angeles Times believes the next provocation from North Korea will be a nuclear weapons test.

What do I think?  Deterrence has failed, and must be made to work again.  North Korea will strike again.  The South’s only chance of re-establishing a credible commitment to deterrence is to hit back.  At that point either Pyongyang gets the message and stands down or we’re off to the races.  If I were a U.S. Marine slumming it among insurgents in Central Asia, I’d hope for the latter– it’s not often you get to fight alongside a force as hardcore as the ROK’s, and even rarer to square off against someone with working tank divisions, hoo-ah.  I do not believe North Korea has a nuclear weapon over a few kilotons.

RUSSIA

David Ignatius at The Washington Post deplores the collapse of Russian democracy.  (The letter from Sergey Kolesnikov is also worth reading).

Anders Aslund at the Moscow Times delicately avoids pointing fingers, but notes that corruption is ruining Russia’s economy.

Fyodor Lukyanov at the Moscow Times says Russia has turned away from its imperialist track.  I take what he says with a large grain of salt.

My take: Russia is too far gone and too far away to change.  Maybe historians will argue over who lost Russia, but for now we need to find a modus vivendi with the Kremlin’s kleptocrats.

MEXICO

Der Spiegel reports on Mexico’s steady descent into a drug cartel dominated hellscape.

Kevis Casas-Zamora at Foreign Policy says the way out of hell is to reduce the emphasis on the military and reform the police and judicial system.

I like Casas-Zamora’s take, but I’m pessimistic either way.  The U.S. needs to consider legalizing pot.

Thats all.  See you next week.

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Some briefs filed in Stanford v. Roche

Recently, several briefs have been filed in Stanford v. Roche, the patent ownership case that is before the Supreme Court and which MIT has expressed an interest in, so we have covered in The Tech.

Also, the Supreme Court has scheduled oral argument in the case for February 28, 2011. See their status web page for the latest info.

Here’s what’s new:
On Dec. 16, Stanford (the petitioner) filed its brief.
On Dec. 21, Alexander M. Shukh, a former Seagate employee involved in current litigation against Seagate about patent ownership filed an amicus brief.
On Dec. 23, the American Intellectual Property Law Association filed an amicus brief.
On Dec. 23, the United States Solicitor General filed an amicus brief in support of the petitioner (Stanford).

Joint appendices were filed on Dec. 16, and Stanford’s counsel is confirming for me whether they have confidential information before providing them.

Roche (the respondent) has until Jan. 25 to file their brief.


For more context, see our past coverage:

Merry Christmas!

Posted at 10:19 p.m Dec. 24.
Updated 10:18 a.m. Dec 27, adding the Solicitor General’s brief.

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California Dreaming

Victor Davis Hanson (KPR: +0.8) has a thumbsucker piece up at National Review where he takes a bike ride through my hometown and reports that it has turned into a third world enclave.

I’m not terribly pleased with Hanson’s editorial comments on Hispanics (hence his relatively low Keith Pundit Rating), but I have to admit that his “The Republic is Crumbling” message and the descriptions he uses to back it up outclass the response from California officials, like this one from State Treasurer Bill Lockyer in the L.A. Times, which squints really hard at the statistics (I’ll leave it to David Hogberg at IBD to tell you how hard Lockyer is squinting) and reports that we shouldn’t worry about the state’s growing debt, because technically, the state’s creditors get to take their slice before hospitals, prisons, or state employees.  Thanks Bill, that’s great news… so long as you don’t live in California, I suppose.

I’m a believer in the “California will muddle through” position– I’m just saying that lately, the other side has laid out its case a hell of a lot better.

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Net Neutrality Rears its Ugly Head

The FCC is releasing a set of regulations for the Internet soon (they wont be made public for a few days), and from the look of things, it looks like Julian Genachoswki thinks he’s found a way to foist net neutrality on us, despite previous court decisions that said he didn’t have the authority.

I think Jack Shafer at Slate has the best take on the problem that I’ve seen (minus, my own, natch)– the key issue here is whether we should allow the free market or the government to determine how information delivery should be prioritized.

There is, admittedly, a second issue, which is whether or not the broadband companies have the market power to justify regulation.  On this point I’m willing to give some ground– I don’t think, as many have suggested, that the absence of market abuse is good evidence of a diverse marketplace.  Some anti-trust measures are needed to avoid monopolistic rent-seeking.

However, I am not convinced that 1) the FTC doesn’t already have our backs on this, and 2) that net neutrality regulation is the correct anti-trust approach.  If a lack of competition is the problem, then why not adopt a set of policies designed to improve competition?  Dictating the prioritization scheme that the Internet will use is a policy whose popularity exceeds its merits.

In any case, it looks like we’re gearing up for a showdown between libertarians and the netroots-left.  Ought to be fun.

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New START Victorious Against Republican Demagoguery.

Jacob Heilbrunn at the National Interest points out what I think most nuclear weapons policy wonks have been thinking to themselves for the better part of a month:

Missile defense doesn’t work.  Nuclear weapons modernization is a waste of money.  And it’s moot: nothing in the New START treaty restricts either.  The only disagreeable thing about this treaty is that it doesn’t do much.  Why are you wasting our time, you sad little men.

I don’t know if I agree with Heilbrunn’s diagnosis that the GOP’s resistance to START was a paroxysm of neoconservativsm, but whatever the hell we just witnessed sure wasn’t smart politics or smart policy.

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Sizing up 2012

Jonah Goldberg (KPR: +1.9) has a short piece looking at the GOP 2012 field that I think is pretty dead on.  You all know my views on the matter.

Walter Shapiro also reports on the 2012 electoral college– long story made short, the new census gave Republicans about 6 votes in the race to 270, with the major winner being Texas (+4).

Speaking of Texas, if you want to read the crowing of one of its citizens, I recommend Walter Murchison’s recent piece in The American Spectator.  It’s best read in the voice of Foghorn Leghorn.

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Julian Assange, politics, and what we think of rape

I realize this topic has been talked about a great deal, yet I still feel the need to react to the frankly disturbing conversation on the blogs started by Keith Yost’s article on the topic. It seems to me that the opposing sides in this debate generally fall into two categories: those who are opportunistically using the rape allegations against Assange to silence all of WikiLeaks and those who are so madly in love with Assange and what he “represents” that they are willing to engage in some of the most revolting rape apologia I have seen since–well, let’s be honest–the last time a rape accusation was covered in the news.

On one hand, we have conservatives who are wetting themselves at the chance to put Assange behind bars. Something tells me that their advocacy for proper rape prosecution and compassion for the victims of sexual assault is dreadfully out-of-character. They want the right thing (a trial to determine Assange’s guilt or innocence) for the wrong reason (silencing an entity dedicated to exposing government and corporate secrets). On the other hand, we have liberals who are attempting to scare and shame the two women–who are possibly rape victims, I might add–into retracting their accusations. Keith Olbermann went so far as to tweet the names of the women, others have released their addresses and contact information, and Michael Moore referred to their accusations as “hooey” while also admitting he didn’t know the details. It seems that some people, men especially, simply cannot get over their bromance with Julian Assange and are sadly willing to smear and intimidate these women in their blind and rabid rush to his defense.

Let us get a few things clear: 1) WikiLeaks may very well have a valuable role to play in maintaining transparency, but it can still serve its purpose if Assange is imprisoned, 2) It is so not OK to dismiss rape allegations out of hand, to misrepresent falsehood as truth (like Olbermann and Moore and so many others have done), to release the names of the accusers in an ongoing rape investigation, or to threaten or endanger the lives of the accusers.

Unfortunately, deeply embedded cultural attitudes towards rape and consent mean that in the US only 6% of rapists ever serve time for their crime. It is sad to think that probably the only reason Assange will be prosecuted (i.e., if he even is) will be because he is being targeted by various governments and not, you know, because he is potentially a rapist.

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The Failure to Pass the Dream Act is a Disgrace

This weekend, the Dream Act– a bill that would provide a path to citizenship to those who illegally immigrated to this country as children, provided they attend college for two years or serve in the military– failed to pass a procedural vote in the Senate. The vote all but guarantees that the Dream Act will not become law in the next two years.

Full disclosure: I’m an outspoken supporter of open immigration.  Free immigration, like free trade, moves resources to where they are best employed and results in mutual gains for all participating societies.  There is a caveat, which is that immigration potentially suffers from implicit subsidies (the higher availability of government services and transfer payments in the U.S) that could distort us from the optimal equilibrium, but as I’ve written before, the evidence on this matter suggests that these subsidies are not large enough to offset the windfall gains that immigration produces.

But even if I were not a rabid La Raza/U.S. Chamber of Commerce-esque amnesty supporter, I would be hard pressed to oppose the Dream Act.  The people that the Dream Act offers a path to citizenship to are, in virtually every sense of the word, Americans.  They grew up in America, they see America as their home country– if you deported them to their country of origin, they would be foreigners there.  And by offering citizenship only to those who complete some college or join the military, we are virtually guaranteeing that the social benefits of their presence will outweigh their costs.

If Republicans and conservative Democrats can block a bill that would offer citizenship to persons who identify as American and would be a net benefit to this country, I think it speaks to the level of populism in our country’s political environment.

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