Not quite the point

Romney is right, of course, that "[t]he $2 billion J.P. Morgan lost means someone else gained.”  But that's not the point, if J.P. Morgan has at least implicit federal guarantees and would impose huge negative externalities on the U.S. and world economy if allowed to fail.

When you don't see a problem with markets when there are negative externalities and implicit guarantees, leaving you opposed to corrective regulation in circumstances where the likes of Paul Volcker support it, you are not really within the scope of conventional and defensible pro-market economic thinking.

Casebook update

The 16th edition of Bankman, Shaviro, and Stark, Federal Income Taxation, which I believe ranks # 2 in sales among basic income tax casebooks (but we try harder), should be available in print within a month or so.  Among other new features, it will have a website that we are hoping faculty who use the casebook will find very helpful.

Musical note

Lately I've been listening to two recently-released albums: the Magnetic Fields' "Love at the Bottom of the Sea," and the Shins' "Port of Morrow."  Often back-to-back, such as when I'm exercising.

"Love at the Bottom of the Sea" is truly brilliant, above all in its lyrics, although the music is quite enjoyable as well (and they work as a package together).  Songwriter Stephin Merritt has been called the Cole Porter of the rock era, and when he is at his best this is no overstatement.  "69 Love Songs," the 1999 triple album which pretty much is just what it sounds like from the title, is one of the towering achievements in pop music over the last few decades.  It's a consistently clever, delightfully conceptually brilliant, homage to, and subversion or deconstruction of, decades of love songs (not love itself) in popular music.

Since then, Merritt has experimented in a number of genres - like Alfred Hitchcock, he seems to enjoy self-imposed formal and technical challenges - with good results that were nonetheless generally below that of "69 Love Songs."

"Love at the Bottom of the Sea" could be called "15 More Love Songs."  While lacking the fresh conceptual excitement of "69 Love Songs," the songs are on average just as good, and perhaps better.  The lyrics range across the love song universe, frequently landing in territory that is distinctive to Merritt's dark but droll vision, and are just remarkably clever.

I saw the Magnetic Fields in concert early last month, and they played most of the new album, which I had purchased already but not yet heard.  The show was great fun, and the new songs were instantly memorable.  The group has evidently learned over time how to complement Merritt's personal glumness so that the show is lively and upbeat.

The Shins, like the Magnetic Fields, are less a band in the traditional collective sense than a vehicle for their songwriter (James Mercer).  "Port of Morrow" offers a principally sound- and melody-based, rather than lyrics-based, experience, and indeed the words sound worse than they actually are when I play it right after "Love at the Bottom of the Sea."  But it is a rich, lush, very enjoyable, great-sounding collection of catchy songs that invite repeat play.  Indeed, if you measure enjoyment based on the urge for repeat plays and the extent to which the songs stick in one's head, the two albums are essentially tied.

Excellent new book on progressive consumption taxation

I've long been partial to the David Bradford X-tax, a progressive consumption tax model that basically takes the flat tax (itself not actually flat, given the zero bracket alongside a positive one), and makes it more progressive by adding higher and more graduated rates. Bradford and his successors have also done a great deal of work in figuring out how this system, or an alternative progressive consumption tax design, could best be operationalized.

Early next month, but already available order for pre-order here, AEI scholar Alan Viard and Tax Foundation scholar Robert Carroll are publishing a book on the subject, entitled "Progressive Consumption Taxation: The X-Tax Revisited." This book does a great job of explaining both the rationale for enacting an X-tax, and how it might actually work.

In some other universe, or perhaps some other part of our universe, perhaps in the far end of the Gamma Quadrant, I would like to think that there is a world much like our own, except that enacting a progressive consumption tax is actually a feasible left-right compromise that one could imagine really happening. It truly has potential Clintonian Third Way merits, although it has never gotten very far politically. The left gets progressivity comparable to that under present law, but much more transparently and at a far lower efficiency cost. The right gets exemption for the part of capital income that it may be sensible to want to exempt that is, for the "normal" return to waiting. Everyone ought to be happy.

But here on planet Earth things took a very different turn, perhaps starting in the early 1990s. Plus, despite its considerable policy merits, the X-tax may somehow fail to be sufficiently salient and reasonable-looking to an ill-informed public. So I personally believe that it is not going anywhere, and I have not for several years devoted significant intellectual effort to examining or emphasizing it.

Still, this is an excellent book that deserves a wide readership. Special comment to readers on the left: however suspicious you might be of other publications emanating from AEI and/or the Tax Foundation, this is one that you should classify as straight-shooting and worthy of your time.

Upcoming Tax Policy Center on taxing Wall Street

On Friday, May 18, at the Urban Institute in Washington, D.C., I will be among the panelists in a public session, sponsored by the Tax Policy Center that is entitled "Making Wall Street Pay: The Pros and Cons of Financial Taxes." The session will start with lunch at 11:45 am and will then run from about 12:05 through 1:30. Urban is at 2100 M Street, but you can also stream the session in the comfort of your own computer.

The other participants will be Michael Keen from the International Monetary Fund, Steve Rosenthal from the Tax Policy Center, Lee Sheppard from Tax Notes, and Damon Silvers from the AFL-CIO. Fuller details regarding the event, including a description and links for either attending or streaming it, are available here.

The session should be fun and interesting. We will have lots of back-and-forth, rather than lengthy individual presentations, and there will also be a diversity of viewpoints. We will spend the most time discussing financial transactions taxes, as they are the closest to centerstage politically (especially in Europe), but we will also address financial activities taxes and risk-related bank levies.

People who are in Washington attending the National Tax Association's spring symposium may also find it easy to get away just for our session, a short Metro ride away from the NTA site.

Back in the game

Apologies for my near-radio silence in recent weeks. In addition to concluding my semester here at NYU Law School, I was involved in a confidential legal proceeding (not, however, as a party to the proceeding). This proved to be rather consuming of my time. But I am now done and have been decompressing for a week. I hope to resume posting regularly, and indeed have an immediate follow-up that I will give its own title.