D. Friedman vs D. Brin

[Here's a link to Brin's post and the comments, including mine, courtesy of Chris Hibbert]

I've been having an exchange on Google+ with David Brin, started by a post of his that began:

Is it "class war" to reset tax levels to the levels of the prosperous 1990s?

I pointed out that, according to the CBO figures, the top quintile of the income distribution was paying a slightly higher average federal tax rate in 2007, the last year for which I could find CBO data, than in 1990, while the bottom quintile was paying about half the rate in 2007 it was paying in 1990, and asked him if what he was proposing was doubling the taxes on low income taxpayers.

My point, of course, was that although there is lots of rhetoric about the rich paying low taxes, what actually happened over the past twenty years was a sharp cut in federal taxes for the lower half of the income distribution.

Brin responded with:

Quintiles are utterly utterly misleading. 90% of the people in the topmost quintile still earn most of their income from wages, not dividends or capital gains. Try the top 5% and 1% and 0.1% and include shelters overseas (estimated.) This is exactly the kind of razzle dazzle switcheroo you should be wary of and have spotted for yourself.

To which I replied by quoting his post, followed by:

I don't think I'm the one offering razzle-dazzle--and I note that while you ask me to look up data, you don't actually offer any.

As you could easily have discovered if you looked up the numbers yourself, the CBO figures for 2007 show the top 1% paying an effective federal tax rate of 29.5%. The figure for 1990 is 28.8%.

The bottom quintile, on the other hand, paid an effective rate of 8.9% in 1990. In 2007, it was 4.0%.

So you have your facts backwards, at least so far as I can tell from the CBO figures--if you have something better, feel free to offer it. The effective rate on the bottom quintile has been cut in half since 1990, on the top 1% it has increased a little. I have no idea, and you don't say, what your source is for "shelters overseas (estimated)," but I suspect it's bluff--do you have figures showing that the top 1% is sheltering much more of its income now than in the 1990's? That's what your argument requires.

Let me repeat my question, since you didn't answer it the first time. You suggest rolling back tax levels to what they were in the 1990's. Does that mean that you want to double taxes on low income taxpayers, to get them back to where they were then? That's the big change, after all.

My figures are only up to 2007, since that's all I could readily find from the CBO; my guess is that the 2010 figures, if I could find them, would show a lower tax rate than in 2007 for all groups, since the current Administration has financed its budget largely with borrowing. But the big change from 1990 would still be the sharp drop in the effective tax rates paid by the lower part of the income distribution. For some reason neither you nor Obama seems to have noticed that--or at least let it interfere with your rhetoric.

Brin has so far not responded. I'm waiting to see if he will support his claims, concede error, or simply leave the argument unanswered. The fact that his response to my first post was, so far as I can tell, pure bluff--no data, just the implication that if one looked at the data it would support his beliefs--is disturbing. 

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David Henderson has a link to a piece that goes into much more detail than I have and finds that the tax system has been becoming pretty steadily more progressive over the past fifteen years, under both Democrats and Republicans.

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The argument continues. For those who don't want to follow the link at the top of this and then search through the comments, here is my most recent response (to two of his):

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David B. writes:

“In fact I agree that taxes for everybody are lower now than they were in the 1990s.”

Because current spending is financed by borrowing. Which, absent a default, will eventually have to be paid for by higher taxes.

That was not however the point of my comments. My point was that taxation has become more progressive since the 1990’s, when you and lots of other people, including Obama, want to claim it has become less. Do you agree with that? If so, why have you gone to so much trouble, with your handwaving about the top 1% and tax shelters, to deny it?

“Put this in the context of 6000 years of history …”

More evasion. If I can’t get you to face demonstrable facts about taxation in the U.S. over the past few decades, I doubt that arguing with you about the past 6000 years of history would be very useful.

You keep trying to make this an argument about whether one supports or opposes the policies of the Bush administration. I didn’t vote for Bush, didn’t approve of his policies at the time, and don’t approve of their continuation by Obama, so you can have that argument with someone else. I’m simply trying to get you to face the fact that the federal tax system has gotten more progressive over time, not less.

And when I point you at evidence that that’s true, your response isn’t to try to rebut it, or even to understand it, but to talk about “you guys” and try to change the subject to your grand theories about America. If I’m going to argue about grand theories, I would prefer to do it with people who care whether the facts they use in their arguments are true or not.

“You even seem to implicitly say that tax rates SHOULD be progressive. Of course they aren't. Look closely.”

I have said nothing at all about whether tax rates should or shouldn’t be progressive. I’ve merely been trying to establish what they are, and how they have changed over time.

“Most of these right wing "studies" incorporate corporate taxes INTO the recipient's claim of taxes paid, under the bizarre incantation that this envelopes what the call "double taxation."”

Does that include the “right wing studies” by the Congressional Budget Office? Have you looked at their figures on the federal income tax alone? That by itself is highly progressive. That plus payroll taxes—which they treat as entirely a tax on the employee—is still progressive, although not as progressive.

How progressivity has changed over time requires a little effort to determine, and you would rather demagogue than make that effort. To see that the federal tax system is progressive, under any plausible assumption about incidence, requires only the ability to read and do arithmetic. But it apparently doesn’t fit your current ideology, whatever that may be.

I am curious, however, as to who you believe pays corporate income tax, since you think the notion that it comes out of money that would otherwise go to dividends and capital gains is bizarre. Is it just manna from heaven?