Occupy Cargill. What?

From:

http://understory.ran.org/2012/01/21/breaking-%E2%80%9Coccupy-cargill%E2%80%9D-activists-stage-citizen%E2%80%99s-arrest-on-cargill-inc/

"Multiple speakers at the rally railed against Cargill's corporate personhood and its extensive lobbying of governments for free trade policies that benefit its profits at the expense of people and planet."

We know that modern supply chains made possible by companies like Cargill actually help reduce our carbon footprint and in many cases outperform more energy intense 'local' supply chains. ( http://economicsprinciplesandapplications.blogspot.com/2011/05/food-miles-kowalskis-and-that-steak-on.html ) . One thing that Cargill excels at is making markets, matching U.S. agricultural products to overseas markets. This is incredibly valuable considering the importance of international trade to the 98% of all U.S. farms that are family farms. According to the USDA:

• U.S. agriculture looks overseas to expand sales and boost incomes. Exports also generate additional economic activity that ripples through the domestic economy.
   
• Expanding existing market access and opening new markets under future trade agreements will significantly boost U.S. agricultural export sales. 
   
• The President's FY2011 budget provides increased discretionary spending of $54 million to enhance USDA's export promotion activities. 
   
• Compared to the overall economy, U.S. agriculture is twice as reliant on overseas markets.
   
• USDA estimates that anywhere from 26 to 30 percent of farm cash receipts in any one year comes from exports. 
   
• Every dollar of exports creates another $1.40 in supporting activities to process, package, finance and ship agricultural products.
   
• U.S. agricultural exports, which in FY 2009 reached $96.6 billion, generated an additional$135 billion in supporting business activity in transportation, distribution, food processing and manufacturing. 
   
• These exports support approximately 1 million U.S. jobs both on and off the farm. 
   
• Some agricultural commodities benefit dramatically from sales in overseas markets.  For example:
  
  1.  64 percent of our almond crop is shipped overseas. 
  2.  74 percent of cotton is exported.  
  3.  49 percent of U.S. rice goes to international markets.   
  4.  50 percent of U.S. wheat   goes into the export market. 
  5.  34 percent of our soybeans are exported.
   
• 96 percent of the world's consumers live outside the United States. 
   
• U.S. agricultural export growth is led by the NAFTA countries of Canada and Mexico andnon-Japan Asia.    

(source: http://www.fas.usda.gov/info/factsheets/tradevalue.asp )

Cargill's efforts to promote free trade should be applauded, as it opens up markets for the many commodities produced sustainably by U.S. family farmers employing the latest technologies. Of course this leads to profits, but contrary to the claims made in the article, true profits exist only at the BENEFIT of all people involved, and never at their expense (other wise trades would not take place and no profits would be realized). The economic definition of profit is the net contribution a firm makes to society. 

Of course, if firms are accumulating cash at the EXPENSE of others, they are not making true profits, but are either committing fraud or theft or extracting rents through subsidies, special priviledges, or regulatory protections (like restrictions on trade). This behavior can be described in terms of game theory as a Nash Equilibrium, particularly a prisoner's dilemma. When government is permitted to engage in excessive regulation and is granted the power to use the regulatory apparatus to benefit special interests, it pays for (more like forces) everyone to play the game. 

This is the sort of corporate abuse of power that the occupy people should be focused on. The lamenting over Citizens United would be a moot point if the occupiers would actually address the problem of excessive corporate power and abuse at its core- the out of control progessive policy agenda and regulatory apparatus of the federal government. I've yet to get the idea from any in the movement that this is their focus. A corporation is NOT a person. However, taxes and regulations on corporations are taxes and regulations on PEOPLE. Lots of PEOPLE, not just CEO's and shareholders, but the millions of consumers, workers, farmers, and small business owners that depend on the mutually beneficial exchanges for their livelihood and day to day life made possible by companies like Cargill. PEOPLE are most empowered, not by government or progressive policies, but by the ability to engage in socially cooperative exchanges and forming socially cooperative relationships. They have a right to organize and use speach to advance their views and causes through whatever corporate or non corporate vehicle they feel is most effective. However, there is nothing noble about PEOPLE using speach to advance an agenda to restrict the free trade and the social cooperation of others, through any vehicle corporate or noncorporate.  As stated in the article, these occupiers actually seem to be (through their castigation of Cargill's pro trade efforts) supporting policies that enrich and empower corporate interests at the expense of family farmers and the 99% of PEOPLE they claim or think they are advocating for. 

Occupy Wall Street: Farmers March

At the following link, you will find an article and youtube video covering a farmer's march
as part of the Occupy Wall Street movement.
http://www.care2.com/causes/occupy-wall-street-farmers-march-celebrates-community-power.html
I'm not sure that 'corporate America' is the demise of the family farmer, given that today some 96% or more farms are actually family farms, practicing modern, sustainable agricultire (see: http://youtu.be/D4ZL7w9q9Jc )
In just this past year we've seen everything from trumped up lawsuits attacking biotech alfalfa, attempts by congress to tell farmers how to market their livestock, threats of requiring CDL liscenses, threats of dust regulation, and now threats of using child labor laws to prevent young people from getting valuable training in agriculture that could encourage their own entreprenuerial ventures in ag, or lead to high paying jobs in science and technology (as many find their way to the lab via the hayfield or corn crop). Regulatory threats and regulatory uncertainty certainly tax the American farmer (and future farmers and agriculturalsts) as much if not more than any other alleged source.
I've written before about how economies of scale in compliance have lead to increased market concentration in agriculture ( http://works.bepress.com/matt_bogard/13/ ) and I urge the OWS people to be careful that they not find themselves tools for more progressive policies that may threaten modern agriculture's ability to sustainably feed the world.

Occupy Wall Street: Fighting the Right Fight?

Previously I had said “Time will tell if those occupying Wall Street calling for ending the Fed and crony capitalism are the true voice of the movement, or if they will ultimately find themselves tools for more interventionism through a progressive policy agenda.” With a recent article in the Washington Post, I think I’m starting to piece together an answer, at least from one protestor.

See:  Why occupy wallstreet will keep up the fight

Take for instance the following quote:

"Only a soft regime change can end the pervasive corruption at the heart of our political system, in which corporate money wins elections, drafts laws and trumps citizen desires.”

How is it that corporate money wins elections, drafts laws, and trumps citizen desires? I've discussed previously the issue of disproportionate political power and abuse as it relates to extreme wealth and corporate influence. In short, its the nature of unrestrained democracy, not unrestrained capitalism. By granting government powers beyond those specifically enumerated in the constitution, progressive policies have represented bounty to be won by whoever can exert the most political muscle, as put by Public Choice Economist Dennis Mueller. If we are going to be concerned with the outlier that is the 1% of wealthiest Americans, our concern should be with those that achieved their wealth via progressive coercive political means as opposed to those that achieved it through socially cooperative means enriching the lives of multitudes. The ignorant short sighted prejudiced view of the 1% as being a homogenous group of thieves and manipulators is not enlightening.

The writer goes on:

" Only the plural voices of everyday Americans, the 99 percent, have the capacity to wake up the 1 percent to their greedy, self-serving ways, and to dismantle the global casino in which $1.3 trillion worth of derivatives, credit default swaps and other financial instruments slosh around every day without a hint of concern or regard for the millions of lives that such speculation can destroy."…And we will see clearly articulated demands emerging, among them … a move toward a “true cost” market regime in which the price of every product reflects the ecological cost of its production, distribution and use; and with a bit of luck, perhaps even the birth of a new, left-right hybrid political party that moves America beyond the Coke vs. Pepsi choices of the past."

While financial instruments may be difficult to understand, they are not bets made at the track or in a casino, they are tools for managing risk and directing capital to fill the most urgent needs of society based on the knowledge and preferences of multitudes of individuals, all giving their input via the price system. While not perfect, as the great economist Frederick Hayek put it, I would prefer imperfect prices over the pretense of knowledge. It was through the pretense of knowledge that the Federal Reserve’s actions in the social planning of money, interest, and housing ( ‘without a hint of concern or regard for the millions of lives that such speculation can destroy.’) that we got the financial crisis and the current recession. The idea of a ‘true cost market regime’ is an even more futile exercise in the pretense of knowledge. As I mentioned in a previous article, when we as a society fail to have the knowledge to determine the correct price and quantity of ice cream for our community or nation, how can we determine the correct price or quantity of carbon (or the ecological cost of any good for that matter)? Aren’t those sorts of calculations what would be necessary to implement a ‘true cost’ market regime? The command and control structure necessary to implement this (without a hint of concern or regard for the millions of lives that such speculation can destroy) would be demeaning to the millions in the 99% and empowering to the wealthiest and politically connected in the 1%. We’ve seen the effects of economics of scale in compliance in agriculture before. We saw how empowering the Markey-Waxman attempt to ecologically price carbon was to the worlds largest corporations.

I think through all of their rhetoric and their own model of direct democracy, many of the OWS crowd may confuse the virtues of the market with democracy. Unfortunately people think that there is something mystical and blessed about the end result of tallying votes. They fail to see how arbitrary this can be, and how poorly voting can work as a means to express and represent individual preferences about very specific issues that deal with the minute details of every day life and work. They confuse voting with the role and social function of the price system. What we need isn’t more democracy, or fascist price fixing regimes. What we actually need is more of the Coke vs. Pepsi choices of the past. I know the author was probably analogizing the little difference between political parties, but Coke vs. Pepsi is a great example of how empowering the price system is compared to the democratic decision making by two barely indistinguishable parties.  Anyone recall how empowering markets were to the 99% with regards to New Coke? How about more recently Netflix’s change in pricing structure? Agvocates are well aware of how empowering markets and social media were when it came to the corporate policies of Yellowtail and Pilot Travel Centers. Could you imagine having to implement these types of changes and  getting these responses through our political system or any number political parties? Of course not. Voting  is too blunt an instrument to do this.When we try to democratize these types of choices, votes are not empowering tools of democracy for the masses, they are empowering instruments for the politically connected 1%.  The answer isn't more voting or additional choices in political parties. The answer is as our founders put it, a republic if we can keep it, restrained from interfering with the minute details and choices of our every day lives.

So I conclude by asking, is the OWS movement really about empowering the masses, or will they ultimately find themselves tools for more interventionism through a progressive policy agenda? If the movement is more concerned about wealth redistribution and things like ‘true cost’ market regimes, they are fighting the wrong fight.

Occupy Wall Street: Hitching a Ride on the Tea Party Express?

The #occupywallstreet movement seems to be a pretty diverse group. From ‘trolling’ the occupywallstreet forums , there seems to be a big concern with corporatism, what economists would consider rent seeking- which is using the political apparatus to gain special favors (in terms of taxes, subsidies, or regulations) . There are also many concerned about the role of the Federal Reserve, which through the social planning of money and interest played a significant role in the financial crisis . And of course, many are rightfully upset over the bailouts. On most of these issues, if they are serious about their concerns, they find themselves practically standing hand-to-hand with the Tea Party. Then, on occasion you will find some listing demands for things like living wages, tariffs, and increased regulation, a Buffet style tax and other progressive end policies. So, you’ve got people within the same movement coming from entirely polar extremes, all converging on Wall-Street with a beef.  While nothing seems official, you can’t help but notice two major themes- 1) a call for getting the money out of politics and 2) class warfare between the top 1% (in income or wealth) and the other 99%. 

Last week, I presented an exhaustive look at the facts related to the distribution of income and taxes paid by the highest income earners. The facts showed that that the wealthy actually do pay more in taxes than their ‘secretaries’ and that the income gains over the last few decades have not gone mostly to the rich. (I have actually added even more to the evidence on my principles of economics blog here). But what about the top 1%?

First off, the top concern should not be the disparity of income or wealth in any society, but the process that generates that outcome. As the data I presented last week indicates, the process in the U.S. allows lots of movement and economic mobility. We want to be careful not to destroy a process that improves the lives of the countless Americans to achieve some idealistic imaginary snapshot of the wealth or income distribution.  Any coercive action by government to impose such a vision on society comes at great costs, borne most heavily by the very people we intend to help. (take for instance,  the minimum wage). So based on the facts and evidence alone, wealth concentration in a free society is a moot point. In fact, a free society that produces unequal shares of income and wealth (including people like Bill Gates, the late Steve Jobs, and the numerous unspoken entrepreneurs) is the kind of society able to deliver a lifestyle and opportunities to the masses.

But, if class warfare is the end in itself, it is interesting to ask, just how much wealth do the top 1% of wealthiest Americans control? Depending on your source you can get different results. According to one source, the top 1 % of Americans (in terms of wealth)  ‘control’ about 20-25% of the nation’s wealth. Another source indicates that they ‘control’ closer to 40%.   But, again, when we look back over the last century, we don’t observe any drastic increase in the concentration of wealth. Whatever the correct number, the idea that the wealthiest Americans control any proportion of the nations wealth is a bit elusive. It might be better to state that the top 1% of wealthiest Americans are connected to 40% of the nations wealth. 

Of course, if we were talking about King Henry the VIII, or Adolph Hitler, or Joseph Stalin, we might correctly say that these people controlled vast amounts of resources vital to the well being of millions of their citizens. However, if you are a wealthy individual that owns as part of your vast wealth a large amount of Netfilix’ stock, what would you say you are in control of? Given the recent drastic plunge in its value, wouldn’t you say that although you were connected to that vast wealth, it is subject to the individual decisions of multitudes of consumers and other investors? The simple fact is, no matter what the asset, owning an asset (be it stocks, collectible sports cars, beach homes, yachts, or Scrooge McDuck’s Money Bin) entails opportunity costs.  Those opportunity costs arise as a direct result of other people’s desires and interest in owning or having access to those resources.  Maybe you own a ton of real estate in shopping centers. That is meaningful only as long as the rest of society values shopping centers. (Again, just ask Coca Cola when they changed their formula, Netflix when they changed their pricing structure, or Blockbuster before them). This is in fact why we have so much mobility in the income and wealth distribution as shown in the data! As my economics professor taught long ago, we the poor college students, were able to outbid wealthy people every day in the ordinary transactions of buying and selling.  One of the most basic principles of economics is that prices force you to consider the impacts of your choices on others. When it comes to allocating resources in society, the market is the great equalizer. Appealing to class warfare by dividing society into fractions of 1 & 99 really gets us nowhere.

Of course, we may agree that when the top 1% (along with corporations and special interests) use their wealth to influence politics the free society paradigm breaks down. In fact, many of the protestors on Wall Street agree with the idea that ‘a democratic government derives its just power from the people… and that no true democracy is attainable when the process is determined by economic power. ‘  

As public choice economist Dennis Mueller is quoted in the article Public Choice Revolution:

"Interest groups will engage in what public choice theorists call “rent seeking,” i.e., the search for redistributive benefits at the expense of others. The larger the state and the more benefits it can confer, the more rent-seeking will occur. The entire federal budget...can be viewed as a gigantic rent up for grabs for those who can exert the most political muscle.”

 Our founders were well aware of these issues as stated in Federalist #10:

"From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties."

-like the 1% and the 99%?

In Federalist #10 they also warned us about the populist appeals and uprisings that may result, but proposed a solution:

“A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project…we behold a republican remedy for the diseases most incident to republican government.”

But the solution is not more government control through regulation of redistributive Buffet taxes. The problem of money in politics is excessive democracy, not lack of democracy.  The remedy proposed by the founders is embodied in a constitution, with specifically enumerated powers, not true democracy as quoted by the occupiers on Wall Street. If we look at the many powers of government today, how many were transfers of power away from the people by avoiding the amendment process or via crazy court decisions (like Helvering vs. Davis or  Wickard v. Filburn)  The purpose of the constitution was to ensure that the government did very little without the consent of the governed.  For the most part, that was achieved through legislation held in the strict bounds of enumerated powers, with expanded powers of government coming through the amendment process.  This strict adherence to constitutional principles was the foundation for a workable democratic constitutional republic, as stated by Economist Thomas Sowell in  Judicial Activism Reconsidered,

“The federal Constitution is "the supreme law of the land," not because it is more moral than state constitutions or state or federal legislative enactments, but because it represents a larger and more enduring majority. Minorities receive their constitutional rights from that enduring majority to which transient majorities bow, not from whatever abstract moral rights are imagined to exist as a brooding omnipresence in the sky.”

Democracy, limited by strict adherence to constitutional principles meant that government would have few powers and resources to spend on corporate interests, or progressive objects of benevolence.   As Thomas Jefferson stated:

“in questions of power then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the constitution”

 If the occupiers are seriously concerned about money in politics, then, once again, they should find themselves in lockstep with the Tea Party in calling for a return to constitutional principles and limited government.  Time will tell if those occupying Wall Street calling for ending the Fed and crony capitalism are the true voice of the movement, or if they will ultimately find themselves tools for more interventionism through a progressive policy agenda.

The Buffet Tax Deception

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance." - Murray Rothbard Making Economic Sense (1995)

Should we really be talking about national tax policies based on the random, anecdotal observations of a celebrity businessman? Recently there has been a lot of talk from the media, politicians, and other commentators about a ‘Buffet Tax’ to ensure that billionaires pay their fair share of taxes. The battle cry comes from comments by very successful businessman and investor Warren Buffet, who claims that his secretary pays more in taxes (as a percent of income) than he does.  There are also claims that income for middle Americans has stagnated, while the wealthiest Americans have enjoyed most of the gains in income growth over the last decade. This is a long post, but the short of it is that these claims may sound good politically, and make great headlines for the media, but they don’t stand squarely with the facts.

Let’s look at the first claim. Do billionaires really pay less in taxes as a percent of income than their secretaries? 

Source: http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml  Historical Effective Federal Tax Rates: 1979 to 2005 Congressional Budget Office

Since these rates have not changed in the last 5 years, these numbers are still relevant, and show that historically the rich (like Warren Buffet) have always paid more. In fact, when it comes to ‘fairness’, the U.S. has one of the most progressive (meaning the rich pay more) tax systems in the world (see the data here at the Tax Foundation).  Sure it is possible that with the correct shelters/loopholes/wealth management, a wealthy person like Buffet could actually end up paying lower overall rates than their secretary. However, what the data shows is that overall, on average, the rich do pay more, with only a few rare and random cases like Buffet paying rates similar to or less than working class Americans. This brings up many questions. Why make major changes in the tax code that will affect millions to address the very few Warren Buffets of the world? Some would say to be ‘fair’ but as noted above, we already lead the world in terms of tax fairness based on income and the rich are already paying more. In terms of all income taxes collected by government, the wealthiest Americans pay most of the taxes.

The top 10% of earners make up about 10% of all households earn about 40% of all income, but pay 55% of all taxes (way more than their proportional share of income). The top 1% of earners make up only about 1% of households, earn about 18% of all income, but pay almost 30% of all taxes, again more than their share of national income.

Source: http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml  Historical Effective Federal Tax Rates: 1979 to 2005 Congressional Budget Office

No matter how you slice the data, there is no way you can claim that the rich are not paying ‘their fair share’ of taxes. (Note this is even after the tax cuts in the early this decade)

Another myth related to this, is that income for middle Americans has stagnated, while the wealthiest Americans have enjoyed most of the gains in income growth over the last decade. Again, this is not supported by the data. The first problem is that commentators and politicians with axes to grind typically refer to the ‘median household income’ to represent ‘middle class.’   While using the median is statistically more robust (less biased) than just the average when it comes to skewed income data, using median household income is still inappropriate. As economists Thomas Sowell and Russ Roberts explain clearly here (video) and here, households have changed tremendously over time, and really aren’t comparable over time. But there are even more reasons why median household income can be misleading.  Researcher Steve Conover points out in a recent article at the American Enterprise Institute’s American magazine, just looking at the median to define middle class is a very restrictive definition. After assembling data on income over the last decade based on data from the US Census Bureau and the Bureau of Labor Statistics, Conover developed several definitions of ‘middle class.’  No matter how many different ways we could define ‘middle class’ when we actually look at data on income gains over the last few years, we find in fact that the middle class income gained much more than the top 20% of earners, while the top 5% actually lost.

 

  Source: The Myth of Middle-Class Stagnation, Steve Conover

Of course, if we are concerned about the distribution of income in society, the important thing isn’t so much who’s gaining in which category, but instead its how often people move up and improve their standard of living.  After all, the American dream is not based on how much the rich pay in taxes vs the poor, or who gets the biggest piece of the pie. The American dream is about going out and getting your own piece of pie, or in other words, income mobility.  As economist Steve Horowitz explains in this video, even if you insist on looking at ‘median’ income earned by ‘households’ vs. individuals, when we look at the data, and follow these people over time, we see lots of income mobility as they move from one part of the income distribution to another.  The data shows that income mobility in the U.S. has been very robust.    As reported in the U.S. Treasury report Income Mobility in the U.S. from 1996 to 2005:

"Economic growth resulted in rising incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups. The degree of mobility in the overall population and movement out of the bottom quintile in this study are similar to the findings of prior research on income mobility."

So, we’ve debunked the myth that the wealthiest Americans aren’t paying there fair share, we’ve shown that middle class Americans have received significant gains in income over the last decade, and that income mobility in the U.S. is a reality. What other excuses can we/they come up with to raise taxes? One might claim that this is necessary to increase revenues, or reduce the budget deficit. In a previous post I’ve already shown how revenues actually increased while the budget deficit drastically dropped after the Bush tax cuts.  Quite a bit of additional research actually shows that higher income individuals are extremely sensitive to tax increases, and that tax increases can contribute to decreased job creation and investment. 

Were it not for the recession, the data shows that the middle class and the American dream was thriving. Instead of focusing on class warfare inspired non-issues (at least when it comes to real data), the media, commentators and our law makers should focus on the real issues at hand, chiefly the regulatory climate and the uncertainty  (as mentioned last month) that it is creating. Besides being based on bad evidence and false perceptions, a ‘Buffet’ tax could also be detrimental to the economy and such talk only adds to the cloud of uncertainty preventing us from getting out of the current economic rut.

Taxes, Elasticity, Revenue, and Economic Activity

Romer, Christina and David Romer, (2010). "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," American Economic Review, vol. 100(3), pages 763-801.

tax increases to be highly contractionary with a negative effect on investment

Alesina, Alberto and Silvia Ardagna (2010) "Large Changes in Fiscal Policy: Taxes versus Spending" In Jeffrey Brown, 2010. "Tax Policy and the Economy, Volume 24," NBER Books, National Bureau of Economic Research.

Fiscal stimulis based on tax cuts increases the probability of future economic growth greater than spending


Carroll, Robert, Douglas Holtz-Eakin, Mark Rider, and Harvey Rosen (2000) "Income Taxes and Entrepreneurs Use of Labor," Journal of Labor Economics, 18 (2), April pp. 324-55

Increases in marginal tax rates reduce the probability of future increased hiring and are associaed with reduced growth in wages.

Gruber, Jon and Saez, Emmanuel, 2002. "The elasticity of taxable income: evidence and implications," Journal of Public Economics, vol. 84(1), pages 1-32.

Finds a very elastic response for incomes over $100k, (.57) with an elasticity of about .17 for incomes < $100k.

Gentry, William and Glenn Hubbard (2000) "Tax Policy and Entrepreneurial Entry" American Economic Review, vol. 90, pp. 283-287.

Finds a significant increase in entrepreneurial activity when tax rates are less progressive.

Djankov, Simeon, Tim Ganser, Caralee McLiesh, Rita Ramalho, and Andrei Shleifer, (2010). "The Effect of Corporate Taxes on Investment and Entrepreneurship," American Economic Journal: Macroeconomics, vol. 2(3), pages 31-64, July.American Economic Association.

"our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity"

The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act Martin Feldstein Journal of Political Economy
Vol. 103, No. 3 (Jun., 1995), pp. 551-572

Estimates the elasticity of taxable income to range from about 1.0 -3.

Lindsey, Lawrence B. 1987. "Individual Taxpayer Response to Taxcuts, 1982-1984." J. of Public Economics 33 (July) 173-206

Found elasticity of taxable income by income category to be .728 for income > $50k, 1.023 for >$100k, 1.413 for >$250k, and 2.0 for > $1 million. Also derived the tax revenue responses to reductions in marginal taxes for those earning more than $200k / yr. Revenues increased by 19% in 1982, 35% in 1983, 56% in 1984.

WHY DO EUROPEANS WORK (MUCH) LESS? IT IS TAXES AND GOVERNMENT SPENDING
Economic Inquiry, 2008, vol. 46, issue 2, pages 197-207

And

Why Do Americans Work So Much More Than Europeans?
Federal Reserve Bank of Minneapolis Quarterly Review
Vol. 28, No. 1, July 2004, pp. 2–13

Finds that taxes, and particularly higher marginal tax rates have a negative effect on labor hours.

Greg Mankiw's Blog: What nation has the most progressive tax system?

Based on these numbers, the U.S. has the most progressive tax system in the world by far.

The top 10% of earners earn about 33.5% of all income on the U.S. but pay 45.1% of taxes. They in essence pay 35% more in taxes than what they earn as a share of income.

There is also an interesting discussion on how these numbers are used and interpreted.

http://gregmankiw.blogspot.com/2011/03/what-nation-has-most-progressive-tax.html