Ben Stein

I enjoy reading Ben Stein, mostly. A few years ago, I always read his articles in The American Spectator. (I liked to buy my copy from the leftwing bookstore in my town; it was fun to see the cashiers register disgust as they took my money.) He wrote about funny things that happened to him while traveling, about his son, about everything. His columns on Yahoo Finance are great also; they contain savvy financial advice from the worldly-wise uncle most people never had. On the other hand, his pieces in the New York Times business section on Sunday are more political. In one he remembered fondly his old neighborhood outside Washington, D.C. where he grew up. Everyone was middle-middle class, except for the family that had a swimming pool (but it was shared by the neighbor kids). Everyone knew each other, and there was a sense of community. Stein contrasts this 1950s scene with his current neighborhood in Beverly Hills, where no one knows his neighbors, apparently, and there is no sense of community.

This contrast Stein relates to income taxes. In the 1950s, under the affable, avuncular Ike, the top marginal tax rate was 90%. Today, with the marginal rate topping out at 39.6%, we have apparently unleashed rapacious isolates who care naught for community, only getting and spending obscene amounts of money. (One column discussed $10 million bar mitzvahs as examples of this wretched excess.) Everyone in Beverly Hills has his own swimming pool. Ben finds it especially unfair that people serving in our military make so little money, at the same time hedge fund fat cats are lighting their cigars with Benjamins.

I remember my father talking about 90% marginal tax rates, and how terrible they were. But I think he also said that wealthy people hired clever tax lawyers to find ways to avoid paying such a high rate. Ronald Reagan once complained that it didn't make sense for him to make more than one picture a year, because of the 90% tax. And of course the Beatles sang of the taxman, who said "that's one for you, nineteen for me." (The top rate in Britain was 95% at one time.) The question is how such confiscatory, rates can foster anything except tax fiddling. How do they build a sense of community? Perhaps the sense of community has other origins besides the tax code. For one thing, if these high rates did not kick in until income was so high that only a few people were subject to them, the rates would have little effect, socially or financially, except to motivate some of the wealthy to flee or cheat. I have the sense that most people were not so affected in the 50s.

We are surrounded by examples of wretched excess, e.g., by professional athletes as well as Wall Street moguls. And I would like nothing better than to double the pay of our miliary; it would be one of the best uses of tax dollars. But I don't want to try to tax everyone into behaving well; that seems quixotic in the extreme. Besides, those $10 million bar mitzvahs must benefit lots of less wealthy people. I know, that's trickle-down economics, but isn't it true nonethless?

Stein seems to have contempt for supply side theories, but I do not recall that he directly argues why these theories are wrong. Why were tax rate cuts in the 20s, 60s, 80s, and 00s followed by increased tax revenues? How are Steve Forbes and Arthur Laffer and Larry Kudlow and the WSJ wrong on all this? How is Paul Krugman right?

I wonder what Stein would find if he went back to his Maryland suburb. Perhaps a sense of community there is alive and well, despite the depredations of Reagan and Bush. I know it is in lots of neighborhoods in the Twin Cities. Perhaps Ben should move back.

Posted by Finn MacCool