Thursday, September 29, 2011

Argument Fail

Update:  Fail Fail.
I admit it.  I was wrong here.  Sort of.  Well, definitely.  But the author's point was subtle and I missed it.  I shouldn't have missed it, but it was easy to miss.

He did not say 400% on savings.  He said 400% on savings income.   On that point, he is correct.

I hate it when this happens.

But it does. And in CATO, which makes it worse.
I showed how many Americans of all income levels are paying effective tax rates of approximately 400 percent on their savings income because the government is keeping short-term interest rates under 1 percent while generating inflation of 3.8 percent at an annual rate. 
While indeed Americans are loosing savings money at about 3% or a little more, the fact is that the rate is 400% higher than the interest rate they are getting.... they are not being taxed at an effective rate of 400% on their savings.   That would mean for every $100 I had, I'd be paying $400 in taxes.  It's not that bad.   Yet.

Now the fact remains that a bad argument (in this case, about low interest raont-tes relative to inflation rates being bad) doesn't mean the point is incorrect.  But the reason I point this out is I don't want our side making bad arguments.  That's the other side's job.

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