Who Benefits From Bubbles?

Paul Krugman Conscience of a Liberal May 2, 2011

One of the more interesting documents published by the IRS — I know, I know, not the hardest criterion in the world — is its report on the income and taxes of the top 400 taxpayers (pdf). A lot of attention gets focused, rightly, on the remarkably low average tax rate these people pay — less than 17 percent in 2007, the lowest on record.

But I was struck by something else: in several years during the last decade the top 400 accounted for more than 10 percent of all capital gains income in America. Just 400 people!

Conservatives often try to sell the notion that reducing the capital gains tax is about helping small business people. But you really want to think of the fact that a significant chunk of that tax break is going to just 400 people.

And when you think about financial regulation, you similarly want to bear in mind that when asset prices rise, a tiny handful of people get a large chunk of the gains; I don’t know this for sure, but I’d bet that they somehow end up bearing a much smaller share of the losses when the bubble bursts.

Anyway, think about it: a lot of policy is dictated by the interests of a group of people who, if you could separate them from their entourages, would fit easily into McCosh 10.

Paul Krugman is an Op-Ed columnist for The New York Times.

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Remember 2001?

May 02

Hard Keynesianism

Surpluses when times are good.

May 02 //

The FEHB Deception

More falsehoods in the Ryan plan.

May 02 //

A Commodity Peak?

Why is this a surprise?

May 02 //

Bin Laden Dead

Finally.

From the Opinion Blogs Dot Earth The Thing That Scared Us

The terrifying thing about this terrorist was the truly fundamental nature of his motive.

Nicholas D. Kristof After Osama Bin Laden...

The killing of Osama bin Laden is a foreign policy triumph for the United States, and it creates new possibilities in Afghanistan. But this isn't the end of Al Qaeda or of terrorism.

Surpluses when times are good.

May 02

The FEHB Deception

More falsehoods in the Ryan plan.

May 02 //

A Commodity Peak?

Why is this a surprise?

May 02 //

Bin Laden Dead

Finally.

From the Opinion Blogs Dot Earth The Thing That Scared Us

The terrifying thing about this terrorist was the truly fundamental nature of his motive.

Nicholas D. Kristof After Osama Bin Laden...

The killing of Osama bin Laden is a foreign policy triumph for the United States, and it creates new possibilities in Afghanistan. But this isn't the end of Al Qaeda or of terrorism.

More falsehoods in the Ryan plan.

May 02

A Commodity Peak?

Why is this a surprise?

May 02 //

Bin Laden Dead

Finally.

From the Opinion Blogs Dot Earth The Thing That Scared Us

The terrifying thing about this terrorist was the truly fundamental nature of his motive.

Nicholas D. Kristof After Osama Bin Laden...

The killing of Osama bin Laden is a foreign policy triumph for the United States, and it creates new possibilities in Afghanistan. But this isn't the end of Al Qaeda or of terrorism.

Why is this a surprise?

May 02

Bin Laden Dead

Finally.

From the Opinion Blogs Dot Earth The Thing That Scared Us

The terrifying thing about this terrorist was the truly fundamental nature of his motive.

Nicholas D. Kristof After Osama Bin Laden...

The killing of Osama bin Laden is a foreign policy triumph for the United States, and it creates new possibilities in Afghanistan. But this isn't the end of Al Qaeda or of terrorism.

Finally.

The terrifying thing about this terrorist was the truly fundamental nature of his motive.

The killing of Osama bin Laden is a foreign policy triumph for the United States, and it creates new possibilities in Afghanistan. But this isn't the end of Al Qaeda or of terrorism.

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Who Benefits From Bubbles?

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