Tax capital gains more– not wealth

Yeah, wealth taxes sound great in theory, but, in practice, not so much.  Long-time critic of our policy regime that has led to so much wealth inequality, Tim Noah makes the strong case that we need to do much better taxing capital gains and that a wealth tax is a fool’s errand:

Why do I make such a fuss about the distinction between taxing capital income on the one hand and taxing wealth on the other? Because it muddies the central problem, which is that taxes on capital and business income have been eviscerated over the past generation to the point where, starting in 2018, the effective tax rate on capital income fell below the effective tax rate on labor income, according to Berkeley economists Emmanuel Saez and Gabriel Zucman. The immediate culprit was Trump’s sharp cut in corporate and estate taxes in 2017, but, as Saez and Zucman demonstrated in their 2019 book, The Triumph of Injustice, for two decades previously, both parties had been whittling away at taxes on capital, starting with President Bill Clinton’s lowering of the top capital gains rate in 1997 from 28 percent to 20 percent. (Biden proposes raising the top capital gains rate to 39.6 percent; the House Democrats propose raising it to a paltry 25 percent.) “Capital income,” Saez and Zucman wrote, “is becoming tax-free.”

That’s a calamity. But fixing it with wealth taxes would be a fool’s errand. For starters, the United States doesn’t have any wealth taxes at the national level, so you’d have to create an entirely new tax. Doing so, as Treasury Secretary Janet Yellen noted in a February New York Times interview, would pose “very difficult implementation problems.”  

Wealth taxes haven’t worked very well in Europe. A 2018 report by the Organization for Economic Cooperation and Development found that the number of OECD countries with wealth taxes dwindled after 1990 from 12 to four because wealth taxes were “more distortive and less equitable” than taxes on capital income and estate taxes. Revenues from wealth taxes in the four countries that kept them were surprisingly low, accounting, in 2016, for 0.5 percent of total revenues in France and Spain and 1.1 and 3.7 percent, respectively, in Norway and Switzerland…

But in the U.S., most of our largest fortunes are built on income, not wealth. The growth in U.S. wealth inequality over the past three decades has resulted less from Rockefellers and Waltons accruing interest on family capital than from corporate CEOs and financial buccaneers being grossly overcompensated for their labor. Income is still where our economy lives, as it has since the Industrial Revolution mooted farm acreage as the measure of financial well-being.

By all means, tax those Rockefellers and Waltons when they die. But while they live, it’s a lot simpler to tax people’s income. There’s absolutely no reason we can’t tax the wealthier among them a whole lot more, as the Biden administration seeks to do.

Are boosters “necessary”?

No!  But does the preponderance of the evidence indicate they would really help? Yes!  Does the preponderance of the evidence also suggest that giving 3rd shots to Americans who want them would have a trivial impact on global vaccine supply and have little impact on the rest of the world (which we really need to do all we can to get more vaccines to)? Yes!  So, let’s boost, damnit!

I really hate this new frame from the anti-booster crowd that vaccines aren’t “necessary.”  Hell, seat belts aren’t “necessary.”  That should not be the standard.  Would it very likely lead to a notable improvement in the US health situation vis-a-vis Delta and almost sure save American lives and prevent a ton of human suffering (even “mild” Covid which many vaccinated are experiencing as breakthroughs can really suck)?  Hell, yeah.  So, let’s boost.  

Here’s the take that really bugged me:

But for the general population, experts have been divided over whether boosters are necessary. Some argue that a third shot (or, in the case of Johnson & Johnson’s vaccine, a second shot) should really be considered part of the initial dosing plan, while others say there is no evidence that the vaccines are losing any strength at protecting people from hospitalization or death from Covid-19 — the worst outcomes that the shots were primarily designed to guard against.

“Even if boosting were eventually shown to decrease the medium-term risk of serious disease, current vaccines supplies could save more lives if used in previously unvaccinated populations than if used as boosters in vaccinated populations,” the paper states…

Pointing to the possibility of side effects from boosters doses, the authors write that “if unnecessary boosting causes significant adverse reactions, there could be implications for vaccine acceptance that go beyond Covid-19 vaccines.”

The FDA, meanwhile, is convening its vaccine advisory committee for a public meeting Friday to discuss Pfizer’s application for Covid-19 vaccine boosters, at which the topic of whether boosters are necessary is sure to come up.

Oh, come on!  We all know that 3rd doses would be better used as first and second doses in the unvaccinated.  But stop pretending this is an either/or to score ideological points!! And, please, enough of the vaccine credibility issues.  There’s no basis to expect that third doses should lead to substantially more adverse responses than we’ve seen with the first two doses.  

Meanwhile, Topol with data from Israel:

And, this unwarranted booster skepticism (especially in light of the data we’re seeing):

What the Israeli data show is that a booster can enhance protection for a few weeks in older adults — a result that is unsurprising, experts said, and does not indicate long-term benefit.

“What I would predict will happen is that the immune response to that booster will go up, and then it will contract again,” said Marion Pepper, an immunologist at the University of Washington in Seattle. “But is that three- to four-month window what we’re trying to accomplish?”

Honestly, I suspect Mandivilli (the NYT Covid reporter) is anti-booster.  It should not have been hard at all to find an expert with a far more optimistic take.  In fact, the only expert quoted here is this exceedingly pessimistic one.  Based on the many vaccines where the protocol is 3 or 4 doses, there’s actually plenty of reason to expect benefit to last well beyond 3-4 months.  Furthermore, these takes completely ignore the fact that it’s not just about waning immunity, but that the 3rd dose seems to be particularly helpful do to the fact that the vaccines just aren’t as effective against Delta (as discussed here).  

And, here’s Noah Smith making the case for Delta-specific booster.  In my conversation on this with BB, he points out that, if you pay attention there’s plenty of people talking about this, and even with mRNA vaccines it’s just got to take a while to test and transition.  But, that said, we really should be talking about this more.  Where, for example, is Mandivilli’s article interviewing all the relevant folks about exactly what would be involved in the manufacturing transition, what the hold-ups might be, and when, roughly, we should therefore expect Delta-specific shots (which would likely take us back pretty close to the levels of success we were having against Alpha, when life was so good).  Smith is right that this should very much be part of our national vaccine conversation and it’s frustrating that it basically isn’t.

Anyway, it may not be “necessary” but if I can reduce my family member’s protection against hospitalization from 90% protection to upper 90’s and increase my protection against a nasty flu-like illness from somewhere in the 70’s to the 90’s, sign me up damnit!

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