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OCTOBER 12, 2021

Meyerson on TAP

Rich Folks' Tax Dodging, Nobel Prizes, and Berkeley's Very Good
October

Until the past few weeks, conventional wisdom had it that the truly
gobsmackingly wealthy paid a relative pittance in income taxes. The
Treasury Department put the rate that the 400 richest families paid at
23 percent, while the Congressional Budget Office said it was 24 percent
and Congress's Joint Committee on Taxation had it at 26 percent.

Now, the Biden White House is out with its own calculation. The 400
richest families, the White House now documents in a just-released
study, don't pay a relative pittance after all. They pay an absolute
pittance: From 2010 to 2018, just 8.2 percent of their income.

To arrive at these numbers, as

**The Wall Street Journal**reported

on Monday, two administration economists included in their calculations
something that those other three studies left out: the unrealized
capital gains in each year they studied that the 400 made as their
wealth increased, chiefly through the run-up in the stocks they owned.
Lest you think this innovation to be far-left folderol, consider: When
the wealth of Jeff Bezos, Elon Musk, and our other gazillionaires is
calculated by such mainstream monitors as

**Fortune**,

**Forbes**, and the

**Journal**itself, they are chiefly measuring the value of these rich
folks' stock holdings. Greg Leiserson and Danny Yagan, the two
economists who authored the study, figured that if the conventional
measure of these folks' wealth was calculated in this manner, it only
made sense to calculate their income in this manner as well.

Makes sense to me.

Now then, a word on Danny

Yagan , whom Biden
appointed to the post of chief economist at the Office of Management and
Budget. Before he took the job, Yagan was an associate professor of
economics at UC Berkeley, in the very department that I profiled
in the

**Prospect**earlier this year as the source of much of the new
focus-both empirical and progressive-of contemporary economics,
which has informed the policies of the Democrats' new progressive
mainstream. And the Yagan-Leiserson study follows by several days the
adoption by 136 nations of a global corporate minimum tax rate, for
which another Berkeley economics professor, Gabriel Zucman, provided
crucial background research on global tax dodging.

And to complete this month's Berkeley trifecta, yesterday the Nobel
Prize in economics went to three economists, two of whom divide one-half
of the prize money, while the third gets the other half. That third
economist is David Card
,
who, as chairman of the Berkeley Economics Department, has turned that
department into the powerhouse it is today. In partnership with the late
Alan Krueger, Card also kicked off the empirical revolution in economics
with their groundbreaking study of two adjacent counties that happened
to be under different minimum-wage laws (one was in New Jersey, the
other in Pennsylvania) and documented that low-wage employment levels in
both counties remained the same. Card followed up with another study
showing that the entry into the Miami labor force of thousands of
recently imprisoned Cubans in the wake of the Mariel Boatlift didn't
depress Miami-area wages. For decades, economists had said these kinds
of changes would have disruptive consequences, basing their conclusions
on equations that relied on a standard model of economic behavior. What
Card did was to substitute actual data for most of those equations,
producing irrefutable evidence that those equations' predictions had
scant resemblance to empirical reality. Today, Card's onetime heresy
provides a foundation not just for Berkeley economics, but also for
mainstream economics and White House economics-and Nobel Prize
economics, too.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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The Case for Deliverism

Democrats can no longer skate by simply on talking about popular issues.
BY DAVID DAYEN

Opposition Grows to Biden's Deportation Practices

The Biden administration is using a public-health order to expel
migrants and asylum seekers, in absence of an immigration policy. BY
MARCIA BROWN

The Little-Known Power Brokers at the Federal Reserve

Individual senior staffers play a huge role, and may explain the Fed's
insularity and governance problems. BY MAX MORAN

⏩ The Influence Game: Jonathan Guyer's Panel on Big Business and
Biden's National-Security Policy

At Netroots Nation, managing editor Jonathan Guyer led a panel on
corporate power and foreign policy. BY PROSPECT STAFF

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