Greg Mankiw on Today’s 90% Marginal Tax Rate

Others have observed that staring at 90% tax on someone’s efforts of today (irrespective of what they did yesterday) makes the question one of morality. As in next-to-slavery. Either my work is worth what it was day one or not. And for others to gain, say, more than those I trade with or am employed by seems right strange. This is where tax policy breaks and falls under its own immorality – and exposes the worst of non-local democratic government (when 50M+1 decide for 50M-1 what could be, should be, local issues). Unsaid is how much more stable and resilient local governance is (for all things domestic). Hard to behead a hydra. Easy to derail DC (foreign, special, and esp. 50M+1 interests).

If the TeaParty folks want an agenda, they should demand a date certain for disestablishing D.C. from all roles domestic, and return governance (responsibility and obligation) to political jurisdictions no larger than, say, 300K citizens – which is a power plant, a couple of water and sewage plants, 5,000+ classrooms, 1,000 hospital rooms, a small airport, etc.. What they can’t do for themselves directly, a voluntary collaboration of nearby communities (deal with the next 90%), and with successive refinement everything that’s embodied in current federal agencies that dictate, rather than collaborate. And then these jurisdictions will be disciplined not only at their ballot box but by competing for the favor of the citizen and their enterprise, and in the competition deliver better governance than anything we’ve seen from what now must appear to be a foreign power to most in that place called “D.C.” George Washington gave the crown back, it’s time for D.C. to do the same.

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