Thursday, May 21, 2015

Hayek in Comics

This is kind of awesome. The Road to Serfdom, in comic book form.

Monday, May 18, 2015

Mad Men's Uneven Amazing Finale

So Mad Men is finally over, and the finale was, well, OK. Which is a bit of an anticlimax for a show that started off so very well. The best, I think, that can be said of the finale is that it could have been worse.

Several of the stories ended satisfyingly: Peggy and Stan are finally together, Joan is still trying to balance personal life with ambition, Pete somehow lucked his way into a new lease on life, etc. But Don's ending doesn't really work, and unfortunately that's the critical one.

The show's writers have said that one thing they really tried with this show was not letting the characters change too much. Sure, Don might go on the straight and narrow for a while, but you know he's coming back to his philandering ways soon enough. So at the end we see Don at a yoga retreat in California, presumably breaking through something in himself and starting anew. It's dawn, of course, with obvious symbolism. But this breaks the whole contract of the show. It's a happy ending, I suppose, but we can't really believe it.

The one thing Don is always saying is that he "wants to build something". But he never quite does - he's constantly hemmed in by the strings other people attach. He's also haunted by his own identity crisis, but he doesn't resolve this. (The crisis, by the way, is why the hypothetical ending in which Don switches identities again in order to start anew doesn't work: he hates himself for what he did. Doing it again would be even worse, and he knows it.) It would have been great to see progress on at least one of these problems of Don's, but we don't.

Endings are hard, so not failing is actually better than average. But it could have been so much more.

Update 5/19: And now I finally realize I may have missed something critical: the final commercial for Coke may have told us that Don goes back to work with a new idea. Maybe his final smile was actually inspiration for a new ad campaign. That fits what we know much better, and works as a "resolution" (i.e. it doesn't actually resolve his inner demons, but it keeps the show consistent and shows his ability to rise to ever-greater challenges). Good. Now I feel better.

Thursday, May 7, 2015

The Rubio-Lee Tax Plan

Jim Geraghty's daily must-read e-mail "Morning Jolt" discussed the Rubio tax plan a couple of days ago:

Under Rubio’s plan, the top rate drops from 39 percent to 35 percent . . . but it kicks in at $75,000 for individuals, and $150,000 for married couples. There are a decent number of individuals making $75,000 and married couples making $150,000 who will be surprised to learn that they’re in the top tax bracket in the United States. Rubio points out that there are various little steps people can take to reduce their taxable income below that threshold -- put money in a retirement account or health savings account, etc., and Rubio-Lee also includes a $2,500-per-child tax credit, which will do a lot for the parents in that higher category. (The other tax rate under Rubio-Lee? Fifteen percent. Right now, the 15 percent tax rate only applies to single filers making $9,225 to $37,450 and married couples making $18,450 to $74,900.)

If you’re a married couple with a combined taxable income of, say, $140,000, currently playing the 25 percent rate, the Rubio tax plan is terrific! Your rate is dropping to 15 percent! But if you’re a married couple with a combined taxable income of, say, $160,000, currently paying a 28 percent rate . . . Rubio-Lee’s 35 percent rate doesn’t look good at all!

Right... sort of. It's true that the hypothetical $160k earning family would have a higher marginal tax rate (35% vs 28%), but would they have a higher tax bill? Under the existing tax plan they pay $31,851.50. Under the Rubio plan they would pay $26,000, a savings of nearly $6,000. It's possible that such families would be OK with the compromise: a higher marginal rate in exchange for a pretty large overall cut and simpler calculations. The actual crossover point (where tax bills would be identical) occurs at $276,450 for married filing jointly. In this bracket the current tax rate is 33%, so the Rubio plan represents only a 2% hike.

What's also worth looking at is how tax bills change as income rises. This is, after all, the reason why we care about marginal tax rates: the higher your marginal tax rate, the argument goes, the less interested you as a taxpayer will be in increasing your income, since an ever-higher portion of your additional income goes to taxes. So consider Geraghty's hypothetical $140k-earning family. Under current law they will be paying $26,587.50; under Rubio-Lee they would pay $21,000. They are contemplating a change which would result in a $20k increase in income. How much do they get to keep? We already figured out their final tax bills, so this is easy: under current law they'd pay an extra $5,264, and under Rubio-Lee an extra $5,000. So even though their marginal tax rate is higher under Rubio-Lee, they'd still be better off when transitioning into the higher bracket.

If they contemplated another $20k increase, then we finally see the marginal rate taking effect: they'd pay an extra $5,600 under current law, but $7,000 under Rubio-Lee. However, as I noted before, they'd still be paying a lower overall bill under Rubio-Lee. Marginal rates are important, but so are overall bills.

So let's recap: Under Rubio-Lee, the top marginal rate is lowered. Actual tax bills are lowered in most cases (the most extra a married filing jointly filer would pay is $2,701 for earnings of $411,500: $111,324 under current law and $114,025 under Rubio-Lee). The marginal rate is increased as much as 7% for some filers, but for those filers their total tax bill is decreased, and marginal rates are decreased for the meaty part of the earnings bell curve (filers currently in the 25% bracket would be reduced to 15%). Nothing is perfect, but this plan seems to balance a number of factors pretty well.