Too controversial? Really? This is a pretty mainstream point of view, although perhaps not the one in political ascendancy at the moment. Hardly the stuff of censorship.
I strongly suspect there was some other reason it wasn't posted.
Fwiw, TED doesn't publish all talks, especially not all TEDx talks, so it's not as if this was singled out to be suppressed. But it sounds like it wasn't selected for publication due to a mixture of: 1) Anderson personally disagreeing with its politics; and 2) TED's attempt to carefully manage its image on anything political, which involves closely planned and timed releases of things like the two "political" videos they did publish, on global-warming and contraception.
The main PR mistake TED made, afaict, was to say enough to give an impression that it was political. If it just got lost in the shuffle, like most TEDx talks do (few are posted on ted.com), it'd be one thing, but Anderson arguing against points in the talk, and then giving the impression that it was scheduled and later pulled due to partisanship concerns, created a fiasco where one wouldn't have existed.
Well, according to the article, Anderson didn't personally disagree with its politics. That's what makes it interesting to me.
> "Nick, I personally share your disgust at the growth in inequality in the US, and would love to have found a way to give people a clearer mindset on the issue, without stoking a tedious partisan rehash of all the arguments we hear every day in the mainstream media.
My suspicion is that it just wasn't that good. This was given at a TEDx event, not an official TED conference, which means they have no control over the content and are pretty free to not post it. Only a few of the TEDx talks ever make it on the TED.com website.
And you are right, this is hardly controversial. You couldn't find a politician who would disagree that a strong middle-class is the backbone of our society.
For instance, it is a small step from "job creator" to "The Creator".
We did not accidentally choose this language.
Weird leaps of logic and data that don't directly support an argument regarding job creation are sufficient reason not to feature this talk (in addition to the partisan rhetoric which is verboten for TED).
While the wording could use some work, it is something to think about. When people ask what I do my general response is, "I destroy jobs". I could just as easily say, "I create wealth" or whatnot, but for people stuck in the mindset that job's are created when work needs to be done it's an accurate statement.
The reality is, the idea of a 'job creator' is somewhat ridiculous, but the language was chosen for a reason which is worth examining.
It probably isn't the content, but the one-sidedness. Tying loss of the middle class to tax policy is a political statement, and probably not even correct - or at least he didn't give much evidence for it.
I happen to agree taxes on the rich should go up, but that's not the point
He pointed out how falling taxes on the rich correlated with a decline of the middle class. But that could just be coincidence.
I could point out that the largest expansion of the US middle class on record happened during the 1950s when the top personal income tax rate was over 90%. But that could just be coincidence as well.
I can point out that economic theory says that the economic impact of giving a person a dollar is directly connected to their likelihood of spending it. Since the rich are less likely to spend than the middle class and the poor, taxing them hurts the economy less than taxing anyone else. But once you descend into economic theory, everyone has a theory and an argument and you get a morass that normal people can't make heads or tails of.
I could point out that the Republican ideology that less taxes on the rich is always good has exactly no evidence supporting it. That's a very thin amount of evidence for the huge social experiment that we're currently running in this country. But once you descend into politics everyone already has their minds made up, so that's a lost cause.
All of which begs the real question; if the proposition is true, what evidence would suffice to actually convince people of it who are not already convinced?
The highest marginal tax rate was over 90%, but very very few people paid it. The tax code was loaded up with deductions, only direct compensation was taxed, and you could still easily convert wages into capital gains, which even in that time were significantly lower than wage rates.
The highest marginal tax rate was over 90%, but very very few people paid it.
More precisely, that was the marginal rate on income over $1 million/year. That would be about $5-6 million in today's dollars. Given much lower CEO compensation at the time, very few people encountered it. (And given those taxes, CEOs had less incentive to increase their salaries.)
The tax code was loaded up with deductions
Deductions have a tendency to accumulate over time. There were a bunch of deductions, but fewer than today.
only direct compensation was taxed, and you could still easily convert wages into capital gains
Theoretically true, but historically stock options were a much smaller portion of executive compensation than is the case today. See http://faculty.chicagobooth.edu/workshops/AppliedEcon/archiv... for a reference. (Incidentally their estimate is that only about 30% of the raise in CEO compensation is due to shifts in taxation policy.)
which even in that time were significantly lower than wage rates.
Massively so. If your ordinary taxes were over 50%, you could opt a 25% capital gains rate.
> (And given those taxes, CEOs had less incentive to increase their salaries.)
Of course. So they just gave themselves company cars and executive washrooms and million dollar desks.
> Deductions have a tendency to accumulate over time. There were a bunch of deductions, but fewer than today.
We got rid of a bunch in the early 80's. As a simple example, all interest (not just interest on primary housing) was deductible before then.
> but historically stock options were a much smaller portion of executive compensation than is the case today
I wasn't suggesting stock options. You don't have to rely on stock options to convert your salary into capital gains. If you were a doctor or a lawyer pulling down a lot of money, you just formed a company and left the money you weren't consuming immediately in the company's bank account.
Few people paid the 90% rate because the income bracket was so high that few people actually made enough money to fall into that bracket. The tax code had fewer deductions in the 1950s then it does now. All compensation was taxed back then, not just direct compensation. And it was much harder to convert wages into capital gains because they defined compensation much more strictly than they do now.
Capital gains rates were not lower than ordinary income rates, however, they used an "exclusion" system (similar to a deduction) that lowered the effective rates to what would be today's ordinary income rates.
Actually capital gains rates were actually lower for top income individuals.
More precisely, you could exclude half your capital gains income, or opt to have all of your capital gains taxed at an alternative rate of 25%. Most people would choose the former, but top earners could benefit from choosing the latter instead.
All compensation was taxed back then, not just direct compensation. And it was much harder to convert wages into capital gains because they defined compensation much more strictly than they do now.
This just isn't right. It was a significant change when, for example, the company car became a taxable benefit. Now employers can't pay for your schooling without paying taxes on it.
Almost everything (except for health insurance) gets taxed today.
It took Western civilization something like 4000 years to write an equation for gravity, a phenomenon exemplified by millions if not billions of examples, each of systems consisting of one moving part. And that was just a description, Newton didn't begin to say _why_ it worked.
Economics necessarily depends on subjective judgment, which doesn't exclude rigor, but does include the possibility that any given set of experts is vulnerable to distortions in judgment from their own political preferences and personal ambitions.
Which means anyone leaving it to these experts is doomed. If you don't understand the basics of the methods and theories well enough to detect when things aren't adding up, you'll just go wherever they lead. And, surprise! most politicians, lacking understanding, discover that the most convincing economists happen to have the prescriptions most convenient politically. A review of the policy sustainability of the world's industrialized economies shows how well that model has worked out. Not convinced? Ask yourself how well Congress would do writing an operating system, an undertaking conceptually much simpler than managing the US national economy.
The problem isn't evidence, or even theory. It's the generally low level of understanding and the dishonesty of the discussion, on all sides.
Increases in taxes tends to shift more and more activity into tax avoidance schemes rather that economically productive ones. See Parkinson's book "The Law and the Profits" for the classic treatment of this.
The fact that people try to avoid paying taxes does not mean that we should never charge them.
Also in recent decades the most successful tax avoidance system has been the systemic pressure from Grover Norquist and allies to reduce taxes at every opportunity and never, ever, let them come back up. We're now at historically low tax rates with a broken budget. Raising taxes can't solve the underlying fiscal problems by itself. But a refusal to do so does make them impossible to solve. (At least without a dramatic restructuring of our country that most would not like.)
But what if the root cause of a middle class decline is "routine" jobs being automated and outsourced? That's what my lay-reading of the Economist over many years tells me, though I'm not in the field.
In that case, tax policy may dampen or slow the decline, but won't fix it.
I agree with almost everything you say, but I think your first two paragraphs only imply that expansion is relatively insensitive to tax rates (so republicans' tax paranoia is unwarranted).
But is it good evidence that raising tax rates today would substantially improve the situation of the middle class? I don't think it is.
Languages are defined by usage, not by some proscriptive description. It is true that "begs the question" is the name of a specific philosophical fallacy that has been discussed for millennia. However in English it is common to say "begs the question" where you mean "raises the question", and therefore that is acceptable usage among native English speakers. (I don't know where that usage came from, at a guess it is a shortened version of the phrase "begs us to ask the question". Anyways it is common usage.)
Now did you have a comment on the actual content of what I said?
The usage is correct. To beg the question is to ask the audience to accept a proposition stated in the question without having first provided evidence supporting the proposition. This is exactly what the OP does, where he states "if the proposition is true..."
The New York Times regularly posts hand-wringing debates between "the usual suspects" on this issues.
Everybody in these debates seems to take it for granted that taxing the rich will hurt economic growth, but maybe just maybe there are some benefits to equality that will make up for that.
Nobody mentions that an economy has a hypothetical failure mode (like the game of Monopoly) where all of the money ends up in one person's hands -- and then trading stops.
Nobody mentions that an economy has a hypothetical failure mode (like the game of Monopoly) where all of the money ends up in one person's hands -- and then trading stops.
Huh? I'm having a really hard time imagining how this could possibly happen. Does that person not ever need to buy anything? If they don't buy things they're taking that money out of circulation, and if you have a central bank targeting anything (or free banking, or most banking systems humans have tried) the people who can make more money will make more money in order to hit their targets. I'm pretty sure that nobody mentions that because the idea is, well, pretty ridiculous.
Someone having money doesn't preclude someone else in the economy from CREATING VALUE. Hacker News is a site filled with people who understand that it's possible to create value out of nothing. Your scenario is impossible, but assuming someone acquired all of X currency and refused to let anyone else have any, that currency is effectively nonexistent - currencies are only worth what they can be exchanged for. People would trade using something else.
People would, but that wouldn't alleviate the overarching economic failure of excess concentration. Look at places like North Korea; there's an underground economy, but virtually all economic power is vested in the state, with dreadful effects for the population at large. Well, you say, that's not a free society in political terms; but preservation of ownership is essentially a political good. Indeed, it's one with a high cost for the American economy:
http://tuvalu.santafe.edu/~bowles/GarrisonAmerica2007.pdf
"Nobody mentions that an economy has a hypothetical failure mode (like the game of Monopoly) where all of the money ends up in one person's hands -- and then trading stops."
I don't think the point is to offer this literally as a likely outcome.
If I interpret the parent correctly, the point is more to argue that there has to exist some level of inequality which even the most hardened libertarian would agree is sufficiently bad for the economy to justify an intervention. Hence reducing it to a question of degrees, a trade-off rather than a pure matter of principle.
Apparently it's too partisan: "This idea is an article of faith for republicans _and seldom challenged by democrats_ and has shaped much of today's economic landscape."
I strongly suspect there was some other reason it wasn't posted.