Soaking the Rich--What's Triviial, What's Possible

I had an early response to Megan McArdle this morning--without doing a lot of work to reconstruct: she wrote that soaking billionaires as Sen. Warren now proposes as part of her financing of Medicare for All would contribute a "trivial" amount; I responded her definition of "trivial" must be different than mine.  Apparently (because I still don't understand Twitter fully) that became part of a bigger discussion.  Coming back to the exchange this afternoon, the points seem to be that billionaires may have between $2 and $3 trillion in wealth, and taxing them as Warren proposes would produce around 4 percent of the total cost. 

Meanwhile Kevin Drum has done a preliminary analysis of the proposal here.  It's a convenient summary but very preliminary.  Anyhow, over 10 years he shows total costs as $52 trillion, the contribution of a 6 percent tax on billionaires as $1 trillion.  That means a contribution of 2 percent of total, which would, I agree, qualify as "trivial".  (IMO 4 percent is a tad above "trivial".)

I should make it clear I'm as ambivalent about soaking the rich as I am about many things.  I've seen the reservations of many on the right, particularly about the difficulties in collection (bureaucratic efficiency is always a big consideration with me.)  But disregarding those issues, here's how I think of it today:

• I'm told I can withdraw 4 percent of my savings (TSP, IRA) each year and likely maintain my capital.  Anything over 4 percent is likely to cause to me to exhaust my savings.
• Based on that, it seems reasonable to hit billionaires with a 4 percent yearly tax--their fortunes wouldn't diminish, on average, and any especially productive or lucky entrepreneurs could increase them.
• Going over 4 percent is killing the goose--you can be decreasing inequality, which is good IMO, but you need to plan to get an alternative revenue source (or finding savings) for the long run.

My opinions are subject to change, particularly as Drum updates his analysis.

Sen. Warren--An Honest Reconsideration

I tweeted today that I was surprised by how much difference the DNA results on Sen. Warren made to me.

I'll expand here. 

When Warren was coming into prominence, Megan McArdle had a blog post challenging the validity of her research on bankruptcy caused by ill health and lack of insurance. I think there was some counter from Warren's supporters.  The specifics have long since vanished from memory, but it cast a shadow on my opinion of her.

Then there was the flap about whether her claim of Indian ancestry was correct and what part it played in her academic career.  Again I've seen some back and forth on it.

Then she ran for the Senate and won, 

So early in her political career I had formed an assessment of her as ambitious, smart, more liberal than me.  And, mostly importantly, so ambitious she might have pushed the boundaries of academic research and made unfounded claims to advance in academia. I must also admit to possible chauvinism, though I'd state it as saying her personality struck me as unlikely to appeal to moderate and male voters (so it's their prejudice, I remain innocent. :-0) Taken altogether it made a package I was reluctant to support for the presidency.

But now I know Warren had a solid basis for claiming Native American ancestry.  Somehow that makes me more comfortable with the idea, supported I think by Boston Globe reporting, that she never used the claim to advance in her career.  (Though her employers may have used it in their EEO reporting.) That makes her less ambitious, or at least not breaking rules in her ambition, which makes me more comfortable in supporting her in the future.  (It's possible, even likely, my standards are different for male versus female politicians.)  And there may be a cascading effect--I'm now thinking about her senatorial career and positions more.  And that helps her.

I've tried to be honest with the above.  I don't know enough about Bayesian analysis to apply it to my changing position.

So, my preferred Dem nominee for 2020 is still Klobuchar/Hickenlooper, but if Warren runs and shows up well in trial runs against Trump in the polls, I'll be a more enthusiastic supporter. 

But my bottomline is still: we must win in 2020.