Our latest Freakonomics Radio on Marketplace podcast is called “The Tax Man Nudgeth.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript.)
The U.S. tax code is almost universally seen as onerous and overly complicated. There is always talk in Washington about serious reform — Michigan Reps. Dave Camp (R.) and Sander Levin (D.) are currently working on it — but, Washington being Washington, we probably shouldn’t hold our breath.
So in this podcast we decided to take a look at the tax code we’re stuck with for now and see if there are some improvements, however marginal, that are worth thinking about. We start by discussing the “tax gap,” the huge portion of taxes that simply go uncollected for a variety of reasons. We once wrote about a clever man who helped close the gap a bit. In this episode, former White House economist Austan Goolsbee tells us why the government doesn’t try too hard to collect tax on all the cash that sloshes around the economy.
Writing for Bloomberg, Chris Christoff and Greg Giroux explore the math behind gerrymandering in Michigan with some fascinating examples and graphics. The 14th congressional district, for example, looks pretty weird from high up:
From Detroit, one of the nation’s most Democratic cities, it meanders to the west, north and east, scooping up the black-majority cities of Southfield and Pontiac while bending sharply to avoid Bloomfield Hills, the affluent suburb where 2012 Republican presidential nominee Mitt Romney was raised.
(HT: The Big Picture)
Our latest Freakonomics Radio on Marketplace podcast is called “Sure, I Remember That.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player in the post, or read the transcript below.) It’s about false memory, particularly in the political realm, and how we are more capable of “remembering” an event that never happened if the event happens to synch up with our political ideology. Read More »
For Americans who rarely get a look at a multi-party (make that multi-multi-party?) election.
Here is one preview of the outcome. This was the first I’ve heard of a Pirate Party, but it is hardly unique to Israel: Wikipedia tells us that more than 40 countries have a version, including the U.S.
The Atlantic has a roundup of the 12 goofiest petitions submitted so far to the White House’s We the People initiative. Our two favorites: “Secure resources and funding, and begin construction of a Death Star by 2016″ and “authorize the production of a recurring television program featuring Vice President Joe Biden.”
A petition to “Direct the United States Mint to make a single platinum trillion-dollar coin” has so far garnered only 5,149 signatures (as compared to the Death Star’s 33,836 signatures), even though Paul Krugman recently endorsed of the idea. Stephen Colbert has also weighed in on the #Mintthecoin movement.
Cass Sunstein, writing on Bloomberg View, reviews the research on judicial voting patterns to determine whether judges are really as “political” as people seem to think. The good news: federal judges aren’t nearly as bad as politicians. ”Judges are far from mere politicians; we don’t see anything like the kind of polarization found in Congress,” writes Sunstein. “At the same time, judicial predispositions matter, and they help explain why judges are divided on some of the great issues of the day.”
The research also indicates that even judges are subject to a phenomenon called “group polarization.” ”[J]udicial voting becomes a lot more ideological when judges sit on panels with two others appointed by presidents of the same political party,” Sunstein explains. “For example, Republican appointees side with plaintiffs complaining of disability discrimination about 29 percent of the time — but that number drops to 17 percent when they are sitting with two fellow Republican appointees.”
As for the Supreme Court, Sunstein highlights research from a new book on the political leanings of Supreme Court justices since 1937:
Strikingly, they find that of the six most conservative justices in their entire sample, no fewer than three are currently on the court (Clarence Thomas, Antonin Scalia and Samuel Alito). A fourth makes the top 10 (John Roberts). By contrast, none of the current justices ranks among the most liberal six, and only one makes the liberal top 10 (Ruth Bader Ginsburg).
For more than eight decades, some of the smartest people in the economics business have worked on index-number theory. The basic issue is how to measure price inflation. A few years ago the government (Bureau of Labor Statistics) started publishing measures (chain-weighted price indexes) that no longer fail to account for consumers constantly shifting the bundle of goods they buy toward those whose prices are rising less rapidly, as the standard CPI does. Consumers do substitute when relative prices change, and the new measures recognize this.
This issue is technical, but it has become crucial in the “fiscal cliff” discussion. Republicans wish to use the new measure to index (link to inflation) benefits of transfer programs, particularly Social Security (OASDI). Liberals don’t like this — it will slow growth of incomes among Social Security recipients (me included). I hate to say it, but the Republicans have it right on this one: using a chain-weighted price index better reflects the true rise in the cost of living. If we are indexing benefits, as we have now for many years, it should be done properly. And here’s a case where economic theory, coupled with careful applied research by a government agency, has produced the right answer. It’s time to use it.
As Republicans and Democrats continue to bicker about spending and taxes, the Onion has stepped in with an excellent plan for averting a fiscal crisis:
STEP ONE: Eliminate school breakfast and lunch programs, Medicaid, the Consumer Product Safety Commission, the Environmental Protection Agency, Medicare, PBS, New Mexico, elk, the Coast Guard, and all dams.
And, our favorite, Step Three:
STEP THREE: Eliminate federal prison system by converting U.S. territory of Guam into an unsupervised penal colony known as “The Gauntlet.”