20 October 2011

Worst Reasoning ... Ever

The following has been circulating at Facebook.

"In the 1950s and 1960s when the top tax rate was 70 - 90%, we laid the interstate system, built the internet, put a man on the moon, defeated Communism, our education system was the envy of the world, our middle class was thriving, our economy unparalleled.

"You want that back?
"Raise taxes on the rich."


That might just be the most lame argument I've ever encountered.

Begin at the beginning: were the rich actually paying 70% or more during that period, or were they availing themselves of various loopholes and paying a good deal less?  My guess (subject to correction) would be that they probably weren't actually paying much more than they are now. 
This matters because the general 'point' is that good things happened at time X, and Y was true through the time X, so Y must be the cause of the good things in X. That is either valid for EVERY pertinent Y, given the EXACT Y involved, or it is not valid at all.

Thus, as to taxes, every loophole that existed for the avoidance of taxes by the wealthy during the period in question must be scrupulously preserved or restored in order for us to get back to the wonderful postulated good old days.  For the loopholes are all part of the Y, right? 

And there are other candidate Ys that had nothing to do with the tax system.  Those were the years of the Bretton Woods accords, after all, which lasted from 1944 until 1971. These accords created a gold standard with regard to international financing.  So maybe it was the gold that was behind all those good things!  (Indeed, personally I take this quite seriously, although I acknowledge that just daydreaming about good old days would not make up an argument for it.)

The 1950s and 1960s were also a period when neither the US nor the UN recognized the People's Republic of China. In both contexts, only the government in Taipai was China.  So ... withdraw recognition from Beijing!  and go back to spelling it Peking!  You want those good things "back," right?

But ... look at the list of "good things" again.  The US "defeated Communism" in the 1950s and 1960s?  Assuming that the word "Communism" in that sentence refers to the bloc of nations led by the old Soviet Union: didn't its "defeat" come after the reduction of the highest marginal taxes?  In the late '80s and early '90s?

What the US did in the 1950s and 1960s was "contain" Communism.  By, for example, making a point of committing to the defense of Quemoy and Matsu, the forward posts of the regime in Taipai that we continued to recognize as the only legitimate China.  So why should this lead us to the conclusion that we should replicate the tax system of the period without also replicating its diplomacy?  Rescind the recognition of Beijing!  (Or, recognize reality and don't do that -- but drop silly arguments.)

The US created the interstate system during the period.  Yes: but should we pay no attention now to the possibility that that is one of the causes of subsequent troubles?  After all, it made the rapid consumption of gasoline a lot more easy and a lot more tempting. That in time became a geostrategic imperative: we have to keep importing the crude oil that makes that possible in ever-increasing quantaties.  In the good old days, the best way to get to California was to take route 66.  It made for a nice TV show but unwieldy travel. You want those good old days back?  Tear up the interstates!

Does that sound silly?  Well, consider again where I got the idea for such an absurd conclusion!

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Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.