Thursday Morning Links

This and that for your Thursday reading.

- Paul Krugman makes the case for significantly higher taxes on the rich:

What would raising tax rates at the top accomplish? It would, to some extent, mitigate the rise in inequality, which some of us consider a good thing in itself: You don’t have to be a leftist to acknowledge that extreme inequality of income and wealth has a corrosive effect on democracy.

Mainly, however, the benefit of higher tax rates on the wealthy would simply be that it would raise more revenue. We live in a time when politicians are trying to downsize even the most basic social protections, claiming that we can no longer afford to pay for them; well, why not raise taxes on millionaires instead of, say, denying nutritional assistance to the poor?

You will, of course, hear claims that raising taxes on the wealthy won’t even yield increased revenue – that the “job creators” will go on strike, or hide their income from the tax collectors. However, researchers have studied the revenue effects of tax hikes (and cuts) about as thoroughly as any topic in economics, and the evidence is decisive: Increasing top tax rates from their current level would lead to substantially higher revenue. At a sufficiently high rate – the best estimates put it above 70 per cent and possibly as high as 80 per cent – further increases would be self-defeating; but we’re nowhere near that point. 

And while Stephen Gordon partially distinguishes Krugman's U.S. numbers (at least for a couple of carefully-selected provinces), I'd think it's worth trying to reach agreement on a couple of principles: that tax rates should in fact be set such as to maximize revenue, and that for similar revenue expectations it's a reasonable public policy choice to minimize inequality rather than maximizing top-end wealth accumulation.

- Michael Wolfson discusses how health care contributes to a more equal society.

- David Climenhaga notes that the Cons are choosing yet again to attack the civil service in an effort to distract from their own scandals.

- Meanwhile, the Cons have also been caught spying on anybody who dares to challenge them. And misusing public resources for partisan gain, then falsely blaming others afterward. Is there any doubt why they're doing their utmost to prevent anybody from getting to the bottom of Robocon?

- Finally, Andrew Nikiforuk writes about new research showing that diluted bitumen doesn't act like oil when it spills - with the effect of rendering useless the oil industry's assurances that they can simply apply normal oil cleanup rules to pipelines transporting dilbit.