Jon as you may remember my dissertation (from USC's Price School) was on the income tax. And for the most part I agree with Banshen's analysis. Had I been the decision maker I would have eliminated the SALT limit entirely - forcing those of us from high tax states to quit being subsidized by middle and lower income tax payers in lower tax states. That might put a fire under the California legislature to change their view on the efficacy of extreme tax rates. The data on how much those provisions actually raise suggested that the Legislature is always overly optimistic. I have not looked at the distributional analysis from the FTB on who actually pays the California personal income tax - but I do know that when federal rates have been reduced that the share of income taxes paid by the highest earners actually rises. I have done some crude analysis on the deficit effects of the bill and I think the estimate of $3 trillion in cost is a bit off. But the National Debt numbers are very scary and the Congress should begin to do something about it. For the last couple of years interest in the national debt as a share of the budget has been rising. I think the business tax provisions have the possibility of adding a bit more growth than the CBO and JCT projected. Since the 2017 projections were done, the Washington estimates underestimated the revenue/growth effects by about $1.5 trillion. Finally there are some other dynamic effects that I think some have not considered. For example, if we cannot use migrants for agriculture or in other areas where they are critical to the California economy - we might well have diminished output.
Thank you for this very interesting and extensive comment, Jonathan. And thank you for subscribing to my Substack. I hope that you continue to find my stuff of interest!
Jon - It has become something I read every day. Timely and interesting. On the immigration issue - while I consider myself a conservative I think there are three classes of people we have to deal with (and I am so damn tired of the left and right doing what my buddy Jane Wellman used to call “Kabuki politics” on this!) - the first are the people who came here illegally with criminal intent and I think the President is right to try to get ALL those people to go away. The second are people who came here illegally for a better life or something else. I think if they have been here for a period of time and want to get a path to at least a green card - the idea of doing a fast lane makes sense to me. The third are children of those who came here illegally as minors and have a clean record - I think we need to figure out a way to move them up in the queue. That makes most of my MAGA friends wretch and most (of the very few of them I still have) liberal friends wretch.
One other comment, I published a book about two years ago (Of Course Its True, Except for a Couple of Lies - by a Simon and Shuster subsidiary) it is a memoir with a focus on family, life and values. If you want a copy I can figure out a way to send you a copy. The only caveat is if you read it - write a review AND tell me the first page on which I get you annoyed.
Jon as you may remember my dissertation (from USC's Price School) was on the income tax. And for the most part I agree with Banshen's analysis. Had I been the decision maker I would have eliminated the SALT limit entirely - forcing those of us from high tax states to quit being subsidized by middle and lower income tax payers in lower tax states. That might put a fire under the California legislature to change their view on the efficacy of extreme tax rates. The data on how much those provisions actually raise suggested that the Legislature is always overly optimistic. I have not looked at the distributional analysis from the FTB on who actually pays the California personal income tax - but I do know that when federal rates have been reduced that the share of income taxes paid by the highest earners actually rises. I have done some crude analysis on the deficit effects of the bill and I think the estimate of $3 trillion in cost is a bit off. But the National Debt numbers are very scary and the Congress should begin to do something about it. For the last couple of years interest in the national debt as a share of the budget has been rising. I think the business tax provisions have the possibility of adding a bit more growth than the CBO and JCT projected. Since the 2017 projections were done, the Washington estimates underestimated the revenue/growth effects by about $1.5 trillion. Finally there are some other dynamic effects that I think some have not considered. For example, if we cannot use migrants for agriculture or in other areas where they are critical to the California economy - we might well have diminished output.
Thank you for this very interesting and extensive comment, Jonathan. And thank you for subscribing to my Substack. I hope that you continue to find my stuff of interest!
Jon - It has become something I read every day. Timely and interesting. On the immigration issue - while I consider myself a conservative I think there are three classes of people we have to deal with (and I am so damn tired of the left and right doing what my buddy Jane Wellman used to call “Kabuki politics” on this!) - the first are the people who came here illegally with criminal intent and I think the President is right to try to get ALL those people to go away. The second are people who came here illegally for a better life or something else. I think if they have been here for a period of time and want to get a path to at least a green card - the idea of doing a fast lane makes sense to me. The third are children of those who came here illegally as minors and have a clean record - I think we need to figure out a way to move them up in the queue. That makes most of my MAGA friends wretch and most (of the very few of them I still have) liberal friends wretch.
One other comment, I published a book about two years ago (Of Course Its True, Except for a Couple of Lies - by a Simon and Shuster subsidiary) it is a memoir with a focus on family, life and values. If you want a copy I can figure out a way to send you a copy. The only caveat is if you read it - write a review AND tell me the first page on which I get you annoyed.
Jonathan Brown