A Phony Piece of Argument from Megan McArdle


I just about fell out of my chair when McArdle said this:

"Everyone I've spoken to about the problem seems to agree that the poor respond to these high marginal tax rates by either taking lower-paying jobs than they could, or working less--not in every individual case, but in aggregate."
Yes, but Frankel's post is three and a half years old. And the person in question made a choice to pursue a job that paid more, but cost her more in gas and other expenses. When you make a choice to change jobs, you have to factor in costs vs benefits and this person didn't do that. Working in a big city will pay you more but costs will have to come out of that extra income--who doesn't know that? Just because she made a poor choice doesn't mean that we should give tax cuts to millionaires. Wait--isn't that what this is about? Because of the false choice presented by a three and a half year-old anecdote, I'm supposed to clap for a tax cut for people making a lot of money?

The problem also happens to be that wages have stagnated for the working poor. And there isn't one single Republican policy that has done anything in the intervening three point five years to alleviate that woman's stress. In fact, by preventing the reform of health care, and by shutting down the government, and making every piece of legislation rise or fall on the whim of a Senator who doesn't care who goes without heat or lights or food or medicine, there is no dynamic movement in addressing the fact that the working poor are being punished.

This is like the argument that raising the price of gas will cause people to drive less. No, people buy as much gas as they need, and no more. People will always have to weigh their wages against what they can afford in added expenses. Being smart about that is a personal responsibility. But that doesn't mean we should cut taxes on the rich.