Greg Mankiw does not get it:
Greg Mankiw's Blog: People Talking Past Each Other: I am regularly struck by how bloggers so often want to pick fights with other bloggers. Rather than giving others the benefit of the doubt, they often seem to interpret the writing of others in the worst possible light so they can then point out how foolish it is.... As far as I can tell, all Steve [Landsburg] is saying is that the true incidence of a tax is not necessarily on the person who writes the check to pay the tax bill. He just made the point in a particularly dramatic way. At its heart, however, his point is pretty standard and hard to argue with.
But Landsburg did not say that the person who writes the check is not necessarily the person who really pays the tax bill. He said:
The Man Who Can’t Be Taxed: Stevens wants to tax the “idle rich”.... [I]t is quite literally impossible to raise revenue by taxing the likes of Mr. Kendrick. We could argue about whether it’s desirable, but because it’s impossible, the discussion is moot.... For the government to consume more goods and services, somebody else must consume fewer. But Mr. Kendrick, by Ms. Stevens’s account, consumes almost no goods or services whatsoever.... [T]he heart of Ms. Steven’s confusion. She thinks that green pieces of paper, or a series of zeroes and ones in a bank computer, can somehow help supply the government’s demand for actual goods and services. It can’t. So what happens if the government takes Mr. Kendrick’s $84 million away? Answer: A bunch of zeros and ones get shifted around on bank computers. Mr. Kendrick goes right on pushing his cars around. And nothing else has changed...
Landsburg did not say that the person who writes the check is not necessarily the person who really pays the tax bill.
Landsburg did not say that somebody else really pays the extra taxes if the government taxes Mr. Kendrick and devotes the money to debt reduction.
Landsburg, instead, said that nobody pays any extra taxes if the government taxes Mr. Kendrick--not that somebody else "really" pays the tax, but that there is no tax to pay..
And that is simply wrong.
That is not "making the point in a particular dramatic way."
That is saying something that is not so.
It is simply not the case that "a bunch of zeros and ones get shifted around on bank computers.... And nothing else has changed."
