Tax Lawyer's Blog

How do you deal with someone as serially loathsome as Jonathan Chait, a man who has bragged that he hates a sitting President because he walks funny and then has the balls to accuse others of being the “lesser lights of the intellectual world?”

Well, a fellow named Clive Crook knows how. Crook writing for the Atlantic exposes Jonathan Chait as a pro-tax, rich-hating, left wing radical who defames others by calling the truths they speak lies:

If you ask me, Jonathan Chait, a writer I respect, has made an ass of himself in a fight he picked with Veronique de Rugy over taxes and progressivity. She offended him by saying that America’s income taxes are more progressive than those of other rich countries.

Chait assailed her “completely idiotic” reasoning, called her an “inequality denier“, “a ubiquitous right-wing misinformation recirculator” and asked if it was really any wonder he cast insults now and then at such “lesser lights of the intellectual world”.

This is vintage nasty, hateful, mean and intolerant Chait. He doesn’t merely disagree with Ms. de Rugy, he personally attacks her by calling her an idiot, implying that she engages in the equivalent of Holocaust denying and declaring her to be, not merely mistaken, but an outright liar. The coup de grace, though, as Crook irrebuttably illustrates, is that Chait is not only wrong for engaging in an ad hominem screed against de Rugy, but also wrong on the substance:

Just one problem. On the topic in question, De Rugy is right and Chait is wrong.

Income taxes in America are more progressive than in other rich countries–according to an authoritative official study which, to my knowledge, has not been contradicted. The OECD’s report “Growing Unequal“, on poverty and inequality in industrial countries, includes a table that provides two measures of income tax progressivity in 2005. This is evidently the source of de Rugy’s numbers. Here they are in an excel file. According to one measure, America’s income taxes were the most progressive of the 24 countries in the sample, except for Ireland. According to the other, they were the most progressive full stop. (A more recent OECD report, “Divided We Stand“, uses different data, a smaller sample of countries and a different measure of progressivity: the results are similar.)

Before you ask, this ranking takes account of employee-side payroll tax as well as the federal income tax.

Chait first objected to de Rugy’s claim about progressivity because he thought she was inferring it from the fact that the US collects the biggest share of income taxes–45 percent of the total, col B1 in the table–from the top income decile. That would be a false inference, as Chait says, because it could be true of a country with a very unequal income distribution even if its taxes were not especially progressive. But look at the table. There was no need for de Rugy to draw any such inference, let alone try to mislead readers. All she needed to do–and all, I’m sure, she did–was glance over to the last column, which actually gives the measure of progressivity, showing the US to have the highest score.

The measure of progressivity is hard to explain, so I can see why de Rugy quoted the tax share instead. But she could have chosen a much more dramatic number if she was seeking merely to bamboozle her readers. Exclude payroll tax, and the top 1 percent of taxpayers, not the top 10 percent, have lately accounted for nearly 40 percent of income tax receipts, the top 5 percent for nearly 60 percent, and the top decile for roughly 70 percent. (Here are the IRS data, excel file.)

For the reason I just gave, this does not prove that the US tax system is more progressive than anybody else’s–but it surely has some relevance to the question, “Are the rich paying their fair share of income tax?” If this isn’t fair, what would be?

The real tax lies, of course, come from those true-believing radicals on the left, like Chait, who have a vested interest in brainwashing the public into believing the fiction that wealthy people are gaming the system, exploiting the poor and not paying their fair share of taxes. Crook dismantles Chait on this account, too:

When Chait, with all the authority of a leading light of the intellectual world, says “Rich Americans pay a bigger share of the tax burden because they earn a bigger share of the income, not because the U.S. tax code is more progressive,” he is making the same kind of sloppy bias-driven error he falsely accuses de Rugy of making. (I’ll refrain from wondering whether he made the mistake deliberately.) According to the OECD, rich Americans bear a bigger share of the tax burden because they earn a bigger share of the income and because the US income tax system is more progressive.

There’s a lot more to say on this subject.

Is measuring progressivity straightforward? No. It’s difficult, because the underlying data are very complicated and hard to compare across countries. Another problem: expressing progressivity across the whole income range as a single number, so that one can say A is more or less progressive than B, can be misleading. Unfortunately, we all want to be able to say, A is more or less progressive than B.

Why, according to the OECD, is the US system so progressive? Not because the rich face unusually high average tax rates, but because middle-income US households face unusually low tax rates–an important point which de Rugy mentions and Chait ignores.

How does the picture change if you take indirect taxation into account? That would make the US system look even more progressive, because the US doesn’t rely on a flat consumption tax like most other governments.

What does the tax-rate schedule tell you about progressivity? Very little, until you factor in deductions, thresholds and opportunities for avoidance. High top rates are meaningless if nobody is paying them.

What happens to tax progressivity at the very top of the US income distribution–inside the top one percent, or 0.1 or 0.01 percent? Good question. When it comes to international comparisons, I don’t know of any good answers. But note that the US isn’t the only country to tax capital at preferential rates.

Should the US system be even more progressive than it already is, bearing in mind the skewness of the pre-tax distribution, especially at the very top? Maybe it should–but a steeper tax-band schedule is a dumb way to improve fairness and raise more revenue.

I’ll take some of these questions up in a bit more detail later. To be getting on with, here’s a column I did that touches on the subject.

A Word about Chait’s History of Hate

Although Crook respects Chait, I do not. All you need to know about this left-wing, true-believing hatchet man is that he wrote the following back when George W. Bush was President (emphasis is mine):

“I think his policies rank him among the worst presidents in U.S. history. And, while I’m tempted to leave it at that, the truth is that I hate him for less substantive reasons, too.

I hate the inequitable way he has come to his economic and political achievements and his utter lack of humility (disguised behind transparently false modesty) at having done so. His favorite answer to the question of nepotism–”I inherited half my father’s friends and all his enemies”–conveys the laughable implication that his birth bestowed more disadvantage than advantage.

He reminds me of a certain type I knew in high school–the kid who was given a fancy sports car for his sixteenth birthday and believed that he had somehow earned it.

I hate the way he walks–shoulders flexed, elbows splayed out from his sides like a teenage boy feigning machismo. I hate the way he talks–blustery self-assurance masked by a pseudo-populist twang. I even hate the things that everybody seems to like about him. I hate his lame nickname-bestowing– a way to establish one’s social superiority beneath a veneer of chumminess (does anybody give their boss a nickname without his consent?).

And, while most people who meet Bush claim to like him, I suspect that, if I got to know him personally, I would hate him even more.”

(Hypocritically, Chait has stridently criticized Joe Wilson and other Republicans for the disrespectful way he claims they have treated our first black President.)

It doesn’t take Alfred Adler to conclude that Chait’s hatred for President Bush reveals more about him than it does Bush. Where does this hatred come from? Well, apparently Chait did not get laid in high school and because of that there arose in him a hatred for the guys who did. Also, apparently, Chait did not have a nice car in high school (he should have asked his Doctor dad to buy him one) and in prototypical liberal “how-dare-you-have-more-than-I-have” fashion, there arose in him a hatred for the guys who did.¹

Chait’s remarks here and elsewhere in his oeuvre prove what conservatives have always suspected of liberals: They are emerald, jade and kelly green with envy of those to whom they feel inferior. For Chait, the object of his envy is successful, conservative (and no doubt, athletic), white males. You know, the adult incarnation of the kids who flicked his nerdy ears in high school and snatched his lunch money.

It’s hard not to conclude after reading Chait that envy is the primary emotion that motivates his hatred of the rich. But, alas, he’s not alone. The left has a surplus of (self-proclaimed) tolerant, compassionate, caring, open-minded liberals, like Mr. Chait, who are capable of hating other human beings simply because of the way they walk (or because they have nicer cars, or nicer homes, or richer parents, or better looking girlfriends).

A miserable bunch, if you ask me, and Chait is at the very top of the list

A reasonable and fair-minded liberal, conservative, libertarian, anarchist, socialist, communist or Marxist, would conclude, after reading just a handful of Chait’s hate-filled columns, that the man is simply not a very decent human being. But his indecency is not to be excused by the fact that he was picked on in high school or that the cute girls thought he was grosser than brussel sprouts. At some point you simply have to man up, move on and get the hell over it.

Note: Interestingly, Chait has found it necessary to write several columns justifying, and in some cases even bragging about, his unbridled nastiness. In fact, the very column Clive Crook vivisects is titled Why I’m So Mean?  Now, I ask you, who does that? Who brags about being mean? A tolerant and compassionate person? Or perhaps a person who doesn’t like himself very much and projects his self-loathing onto others? I think I know the answer.

Footnotes:

¹   Chait attacks his high school classmates whose parents bought them nice cars by accusing them of thinking that they earned them. But how does Chait know what they are thinking? And how does he know that they didn’t actually earn the cars by meeting some standard set by their parents? Envy blurs judgment.

And Chait obviously believes he is in possession of a great intellect. But was that intellect earned any more than one’s parent’s wealth was earned? Is Chait any less advantaged by being born with a high IQ those who are born with a rich parents who buy them things? Apparently, for Chait, the in-born advantages he was blessed with are somehow more creditable than the in-born advantages others were blessed with? This, folks, is what hypocrisy looks like.

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