Tuesday, December 7, 2010

Sanders on taxes and trade

I agree and disagree with what Bernie Sanders says here:

The Estate Tax issue is, to me, Sanders' strongest example of a policy tailored to benefit only the most wealthy Americans. I can't think of a tax that, while being a useful way for a government to raise money, is so morally justified. You can argue that a person who worked hard should get to keep his money, but why should his children get to keep his money, or his children's children, who haven't even brushed elbows with hard work. Very large inheritance should be taxed for no other reason than to prevent the growth of an aristocratic class. And to take it a step further, Michael Kinsley argued in the Atlantic a while back that if the Boomer generation really wants to live up to their parents' legacy - a generation that lived through a Great Depression, defeated fascism and saw the collapse of communism - they should give up all their inheritance to taxes and use the windfall to pay off the debt. I see no reason to disagree with that.

Where I think Sanders falls down is when it comes to trade. He seems to take it for granted that a product made it China is equivalent to a job lost in America. Even if international trade was as zero-sum as Sanders perceives it to be, I would find it hard to muster a lot of rage at the thought of a very poor Chinese person feeding her family with income earned by making cheap sneakers for Americans. But the main point is that there is a broad consensus among economists that trade among nations is not zero-sum. While t-shirts and sneakers might be made it China, some people point out that American manufacturing isn't really in long term decline at all. It's easy enough to look at the tag on your jeans, but not so easy to know where machinery components were made.

Finally, and this may be beside the point, if Bernie Sanders was a character from Seinfeld, he would be Frank Costanza.

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