Tyler Cowen predicts the future

Tyler Cowen, writing in the New York Times on July 20, 2013, accurately predicts the future:

If you’d like to know where American political debates are headed, the data suggest a simple answer. The next major struggle — in economic terms at least — will be over whether taxes on personal wealth should rise — and by how much.

He goes on to cite a study by Thomas Piketty, who was little-known outside of economic circles back then.

On a related note, I read this Bloomberg report today contrasting the booming luxury home market with lagging demand for middle-class property. I think this is evidence of faux-recovery — Fed stimulus has succeeded in inflating stock prices (92 percent of the value of directly-held stocks is owned by the top 13 percent of households), but done little to create new middle-class jobs (as yesterday’s jobs report indicates) or bring about any substantial relief for the rest of us.

Quote of the Day: Tyler Cowen

From Tyler Cowen, writing at MarginalRevolution about a separate post by Scott Sumner:

…a lot of the debate about taxation is more about showing the wealthy that they need to lose (or win, on the other side of the debate) a few political battles than it is about actual canons of efficiency or, for that matter, even well-specified theories of egalitarian justice. For instance, I find that few proponents of a higher inheritance tax realize it will increase current consumption inequality by encouraging the wealthy to consume more rather than paying the tax. Nor do they seem to care, once this is pointed out.