Just a few minutes this evening, unfortunately, to put anything up. So, I’d like to point to you to two good articles.
In 2010, the top income tax rate bracket for ordinary income is 35 percent. Besides wages and interest income, this income category includes profits from pass-through business firms—sole proprietorships, partnerships, and S-corporations.
Under the president’s proposal, the top bracket will rise to 39.6 percent. A stealth provision that phases out high-income taxpayers’ itemized deductions will also be reinstated, adding another 1.2 percentage points to the effective tax rate, bringing it to 40.8 percent. Wages and some of the pass-through income will also remain subject to a 2.9 percent Medicare tax. These 40.8 and 43.7 percent tax rates, which will apply in 2011 and 2012, match the 1994 to 2000 rates—the same top bracket, stealth provision, and Medicare tax were in place then.
But the picture changes in 2013. Under the healthcare law adopted in March, the Medicare tax will rise that year, from 2.9 to 3.8 percent. Also, a new 3.8 percent tax, called the Unearned Income Medicare Contribution (UIMC), will be imposed on high-income taxpayers’ interest income and most of their pass-through business income that’s not subject to Medicare tax. So, under the president’s proposal, virtually all of top earners’ ordinary income will be taxed at 44.6 percent, starting in 2013.
The second is a thought provoking essay by Arnold Kling on “experts” and the outsized role they play in our lives. I can’t quit thinking about it and highly recommend it to you.
Here’s a taste:
Populists often make the mistake of bashing experts, claiming that the “common man” has just as much knowledge as the trained specialist. However, trained professionals really do have superior knowledge in their areas of expertise, and it is dangerous to pretend otherwise.
I have faith in experts. Every time I go to the store, I am showing faith in the experts who design, manufacture, and ship products.
Every time I use the services of an accountant, an attorney, or a dentist, I am showing faith in their expertise. Every time I donate to a charity, I am showing faith in the expertise of the organization to use my contributions effectively.
In fact, I would say that our dependence on experts has never been greater. It might seem romantic to live without experts and instead to rely solely on your own instinct and know-how, but such a life would be primitive.
Expertise becomes problematic when it is linked to power. First, it creates a problem for democratic governance. The elected officials who are accountable to voters lack the competence to make well-informed decisions. And, the experts to whom legislators cede authority are unelected. The citizens who are affected by the decisions of these experts have no input into their selection, evaluation, or removal.
A second problem with linking expertise to power is that it diminishes the diversity and competitive pressure faced by the experts.