Author Archives: tduv

Tom Fixes the Tax System!

by Tom

Nathaniel’s snark below aside, I am technically a co-contributor to this site and will keep blogging occasionally until Nathaniel removes my access.

The issue that I really wanted to get into was an issue of marginal tax rates.  This may seem like a bit of an esoteric topic, but I wanted to talk about it in the context of the income inequality that we see in America today.  My question then is at what rate should the marginal tax rates be set to insure that each income group is paying its proper share of federal income tax.  My guiding principle in doing this is that the percentage of total annual income earned by each quintile should be equal to the percentage of total tax paid by each group.  I know that I’m ignoring local and state tax rates, earned income tax rates, tax expenditures, every tax deduction out there, and using gross generalizations, but this is my thought experiment and I’m going to do it how I want.

Click image to make big… and see Tom’s genius.

If we then assume everybody in each grouping has the average income, the marginal tax rates for each quintile would be below:

Lowest fifth Second fifth Third fifth Fourth fifth Highest fifth Top 5 percent
29.51% 29.21% 29.60% 29.29% 12.22% 41.37%
4.33% 5.27% 6.18% 16.56% 18.74% 27.97%
173.13% 158.61% 79.01% 10.64% -13.26% -3.18%

There are three different scenarios above.

The top one is what happens if we assign tax rates based on percentage of income earned by each quintile.  I was frankly surprised at how much needed to be paid by those in the bottom quintile to pay for their share of the national income.  It was also interesting how the data separated out the top 5% from the other 15% in the top quintile.  It shows that those at the very top are pulling away from the upper middle class and that those below them are frankly not doing quite as well.

Continue reading

Greetings and an Introduction to New Orleans

Editor’s Note: Not Responsible for Tom Duvall

Hello all.  My name is Tom and I will be posting on this blog as long as Nathaniel lets me.  My posts won’t really be as education-y or necessarily as NOLA-y, but they what they lack in those characteristics, they will make up for in length and lack of pageviews.

I wanted to start off with a post about Louisiana, as it does seem appropriate with the name and theme of the blog.  I read All the King’s Men by Robert Penn Warren two years ago and loved the great description of politics in the passage below:

More money for graft, they always screamed. “Sure,” the Boss had said, lounging easy, “sure there’s some graft, but there’s just enough to make the wheels turn without squeaking. And remember this. There never was a machine rigged up by man didn’t represent some loss of energy. How much energy do you get out of a lump of coal when you run a steam dynamo or a locomotive compared to what there actually is in that lump of coal? Damned little. Well, we do a hell of a lot better than the best dynamo or locomotive ever invented. Sure, I got a bunch of crooks around here, but they’re too lily-livered to get very crooked. I got on my eye on ‘em. And do I deliver the State something. I damned well do.” The theory of historical costs, you might put it. All change costs something. You have to write off the costs against the gain. Maybe in our State change could only come in the terms in which it was taking place, and it was sure due for some change. The theory of the moral neutrality of history, you might put it. Process as process is neither morally good nor morally bad. We may judge results but not process. The morally bad agent may perform the deed which is good. The morally good agent may perform the deed which is bad. Maybe a man has to sell his out to get the power to do good.

The theory of historical costs. The theory of the moral neutrality of history. All that was a high historical view from a chilly pinnacle. Maybe it took a genius to see it. To really see it. Maybe you had to get chained to the high pinnacle with the buzzards pecking at your liver and lights before you could see it. Maybe it took a genius to see it. Maybe it took a hero to act on it.

It’s a quote that says a lot about the political world of old-school Louisiana that is sadly gone, but it can do a lot more work to explain these last two years of politics.  The quote comes when the young formerly idealistic man is judging the world of Willie Stark, trying to come to grips with all of the personal corruption and public good that this man was responsible for.  It’s a tough issue to come to grips with and is one of many I hope to explore in my time on this blog.