Of Course It's Weird To You, You're A Twat...

Little Matty once again furrows his brow and thinks thoughts quite stupid on matters economic:

Michael Kinsley delivered a pretty righteous smackdown of Greg Mankiw on Obama’s tax policies that reminded me of a point that I think too often goes missing in these discussions of incentives: income effects.

Specifically, while it’s true that if you cut my income tax rates I would have more monetary incentive to pitch new freelance pieces, I would also have more money than I currently have. And if I had more money, I’d feel less incentive to pitch new freelance pieces. Indeed, I might decide that I should take advantage of my higher level of take-home pay by doing less work and enjoying more leisure time.

Indeed, Matty, you might. It's a fundamental economic trade-off.

Now of course if we set a new tax bracket with a cutoff right around my current income point, then fiddling with that rate would purely impact by [sic] incentives in a forward looking sense. But that’s a pretty special case. For a guy with $500,000 in taxable income, the Bush tax cuts didn’t just mean a reduction in his marginal tax rates they meant a giant increase in his post-tax income. I’m trying to picture a guy with that kind of income, someone who presumably already works long hours, coming home one day and saying to his wife “good news, honey, thanks to Bush’s tax cuts not only are we more financially secure than ever before but I’m going to respond to that change in our status by working even longer hours and spending less time with you and the kids!” That’d be weird, right?

Sure, it's weird to you. But then again, you're a twat.

You're a twat, Matty, because (once again) you're passing judgment on matters of which you know naught. Your imaginings? That isn't the way it works with entrepreneurs and the self-employed. You wouldn't understand that, in no small part because you haven't an iota of education, training or experience that is actually relevant to the subject:

• You have a degree in Philosophy.
• You've worked at nothing but blogging and writing since graduation.
• You don't like business types.
• You don't hang around business types.
• You've never run a business.
• You've never tried to start a business.
• You've never actually worked for a real business.

Of course it's all weird to you. You don't have a clue. Period.

It's late, and I'm not in the mood to waste time explaining the obvious to twats, so I'll just leave you with one question, Little One. If you can puzzle out the answer to this question, it will set on the path to discovering why you're full of shit on this particular subject:

What's the cheapest capital available to an any entrepreneur or self-employed businessperson for investment in either a new business venture or in the maintenance or expansion of an existing company's productive capacity?

And Matty, I am both an entrepreneur and self-employed.

I know the answer.

It's Econ 101 stuff.

Now try your Ivy League best.

Comments

[Mike C.]

If you don't tell him it's an "open book" test, he'll never answer.

Oh, you might want to get him a book while you're at it... One that hasn't been colored in yet would be nice.

[Eric Blair]

It amazes me sometimes the way that people like Matty opine on stuff for the reasons you list Dennis.

I guess I really should not be.

[Dan from Madison]

Eric - What is more amazing is that they get paid actual money for doing it while Dennis is here calling their bullshit and getting paid an Pere Ubu cd once every six months - if that.

[richard mcenroe]

Ummm... carbon credits?

Ummm.... Free government grants from Nancy Pelosi?

Ummm.... The government handing my unions a piece of my company and letting them set their own compensation schedule?

It COULDN'T be my own time, effort and expertise, could it? 'Cuz that would just be weird...

[Allen]

Apparently, he can't multiply or divide either. Now, having a 6+% increase in my after tax income is a cause for a party, I wouldn't call it "giant." For a moment there I thought he was going to accidently stumble into a debatable point; that is, the magnitude of the economic activity due to the change in taxes.

My final answer: time is money.

[mojo]

The secret fear that someone, somewhere may be enjoying themselves in unapproved ways...

[barney frank]

What's the cheapest capital available to any...?

I know, I know! The answer is the desperate politician's, I mean, the entrepreneur's very own $200,000.

[aelfheld]

So, reducing taxes means Little Matty'll 'work' less?

Okay, that's two good reasons to support tax cuts.

[Dennis the Peasant]

aelfheld-

Good point.

[Zach]

Phrases that should make you pause:

Michael Kinsley delivered a pretty righteous smackdown of Greg Mankiw on Obama’s tax policies...

Not to focus on titles, but one of these two men is a professional economist writing about his area of expertise. No, not that one. The other one.