Cut the deficit, or help (cheating) rich people?

That’s the question faced by Republicans as they approach the budget for the IRS and it’s auditing division.  Investment in auditing brings in $10 in otherwise uncollected taxes for every dollar spent.  Obviously, most of those uncollected tax dollars lie with rich people.  So, if Republicans really wanted to cut the deficit, they’d do all they can to step up IRS enforcement.  If, on the other hand, they are simply interested in doing the bidding of the richest Americans– even those who cheat on their taxes– they take the opposite tack.  You’ll never guess which they’ve chosen.   From the Post (via Ezra):

Every dollar the Internal Revenue Service spends for audits, liens and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency’s budget.

House Republicans, seeing the heavy hand of a too-big government, beg to differ. They’ve already voted to cut the IRS budget by $600 million this year and want bigger cuts in 2012…IRS Commissioner Doug Shulman told the committee Tuesday that the $600 million cut in this year’s budget would result in the IRS collecting $4 billion less through tax enforcement programs.

I know they are out there, but I increasingly wonder how any serious thinking person can support the House Republicans.

Comedic interlude

I’m a huge Far Side fan, but I did not remember this cartoon I just noticed sitting outside a colleague’s door:

Good stuff.  Of course, thought immediately of this:

It did make me and said colleague/friend wonder just how well known this theme is from the actual story and movie “Cry in the Dark” as opposed to the classic Seinfeld moment above.   For one thing, the phrase “a dingo ate your/my baby” certainly seems to have lasting cultural relevance whereas the actual quote from like in the film is “a dingo took/stole my baby.”  Either way, don’t locate your nursery next to a dingo farm.

And, as long as I’m violating Gary Larson’s copyrights today, here’s my favorite:

Dating, complexity, and ideology

Really cool post over at the OK Cupid blog (they regularly mine their data on wannabe on-line daters for fascinating observations on human nature) on best questions to ask on a first date.  Idea being you want to ask seemingly simple and innocuous questions that tell you something fairly important about the other person.  For example, people who like the taste of beer are much more likely to be open to sex on the first date (that’s a no for me).

The really cool one from a Political Science perspective, however, is this:

We were very surprised to find that this one question very strongly predicts a person’s ideas on these divisive issues:

Should burning your country’s flag be illegal?
Should the death penalty be abolished?
Should gay marriage be legal?
Should Evolution and Creationism be taught side-by-side in schools?

In each case, complexity-preferrers are 65-70% likely to give the Liberal answer. And those who prefer simplicity in others are 65-70% likely to give the Conservative one.

This fits in with a fairly solid body of evidence finding that liberals are more  likely to prefer informational complexity and are more likely to rate higher on measures of “cognitive complexity.”  I don’t think any of the political measures ever ask if you simply prefer complexity or simplicity, but it makes sense that it would lead to somewhat similar results.  Sorry simpletons :-).

The limited value of an elite university education

I saw in the news this week that tuition at Duke University next year will top $40,000.  Damn, did I love my time at Duke and I think I had an absolutely terrific education, but no way is it worth that much.  Having taught at state schools for many years, I don’t have a lot of illusions– no, even the best ones are probably not going to give you as good an education at Duke.  But, the greater value of a Duke (or similar elite private university) education certainly isn’t worth the 5-6 times more than in-state at UNC or a similar school.  Again, I think my Duke education was fabulous, I’m grateful for it, and I don’t think it can truly be replicated in a top state school, but it is really hard to argue for it in cost/benefit terms.  In fact, the latest research shows, that in pure cost/benefit, it’s a big loser.  Smart kids who go to state schools earn just as much money later in life (from the Times Economix blog):

A decade ago, two economists — Stacy Dale and Alan Krueger — published a research paper arguing that elite colleges did not seem to give most graduates an earnings boost. As you might expect, the paper received a tonof attention. Ms. Dale and Mr. Krueger have just finished a new version of the study — with vastly more and better data, covering people into their 40s and 50s, as well as looking at a set of more recent college graduates — and the new version comes to the same conclusion.

Given how counterintuitive that conclusion is and, that some other economists have been skeptical of it, I want to devote a post to the new paper.

The starting point is the obvious fact that graduates of elite colleges make more money than graduates of less elite colleges. This pattern holds even when you control for the SAT scores and grades of graduates. By themselves, these patterns seem to suggest that the college is a major reason for the earnings difference.

But Ms. Dale — an economist at Mathematica, a research firm — and Mr. Krueger — a Princeton economist and former contributor to this blog — added a new variable in their research. They also controlled for the colleges that students applied to and were accepted by.

Doing so allowed them to capture much more information about the students than SAT scores and grades do. Someone who applies to Duke, Williams or Yale may be signaling that he or she is more confident and ambitious than someone with similar scores and grades who does not apply. Someone who is accepted by a highly selective school may have other skills that their scores didn’t pick up, but that the admissions officers noticed.

Once the two economists added these new variables, the earnings difference disappeared. In fact, it went away merely by including the colleges that students had applied to — and not taking into account whether they were accepted. A student with a 1,400 SAT score who went to Penn State but applied to Penn earned as much, on average, as a student with a 1,400 who went to Penn.

There you have it.  Of course, there’s plenty to be recommend for a Duke, Yale, Williams, etc., education beyond future earnings (personally, I believe that the academic rigor at Duke, the overall educational environment,  and the amazing quality of my peers and professors gave me an educational experience that most certainly cannot be summed up by dollar and cents).  Where I would ultimately come down is that if one can afford an elite private education without a major financial sacrifice, go for it, there’s nothing better.  But, if cost needs to be brought into consideration, as it certainly does for most, a top state school is certainly the way to go.

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