One Minute Economics LessonApr 09, 2009
A delightfully insightful and quick explanation of the wonders and efficiencies of what was once known as capitalism in this county by one of our favorites, Don Boudreaux, chairman of the Economics Department atGeorge Mason University, courtesy a heads up from the Tuesday Morning Group's John Taylor:
Editor, Washington Post
Supporting Pres. Obama's efforts to "redistribute" incomes, E.J. Dionne quotes an administration official: "'Over the past two or three decades, the top 1 percent of Americans have experienced a dramatic increase from 10 percent to more than 20 percent in the share of national income that's accruing to them,' said Peter Orszag, Obama's budget director. Now, he said, was their time 'to pitch in a bit more'" ("The Re-Redistributor," March 2).
This "Progressive" mindset poisons sound thinking.
First, in market economies incomes aren't "distributed"; they're produced and earned. Second, persons whose earnings rise disproportionately more than those of other persons generally achieve this outcome by increasing their production disproportionately more than other persons increase theirs; the fact that someone's income rises means that he or she already is pitching in more. Third, the share of federal individual income-tax revenues paid by America's top one-percent of income earners has recently been on the rise. In 2006 (the latest year for which data are available) this tiny group of Americans paid a whopping — and all-time high — 39.9 percent of such taxes.
Sincerely, Donald J. Boudreaux Chairman, Department of Economics George Mason University Fairfax, VA 22030