Larry Summers has written a remarkable and short editorial over at the Financial Times, How to Fix Costly and Unjust US Tax System. He starts by noting that all this talk of closing loopholes is stupid because it will raise very little money and it will leave us with an overly complex tax system. One thing he notes isn’t exactly surprising, but all the same, I didn’t know it, “The richest taxpayers actually make relatively little use of deductions and credits.” This is a particularly stunning statement when you consider that the richest taxpayers get enormous deductions.

You’ve probably heard about the carried interest loophole that allows, for example, hedge fund managers to claim that their salaries are capital gains and thus only taxable at the 15% rate. As I’ve written before, this loophole only costs the government about $2 billion per year. Summers says this is just the tip of the iceberg.

He mentioned a number of ways that the rich avoid paying the taxes that they should. But his focus in on the estate tax. He notes that each year at least $1.2 trillion is inherited, almost exclusively from the very wealthy. And yet, the federal government only gets about 1% of this in tax revenue. But on the books, the estate tax is 55%. The rich manage this trick of paying almost no estate tax with various accounting games. Summers estimates that if we fixed this, it would bring in at least $50 billion per year. And in the first ten years (because it would change behavior), it would likely bring in more than a trillion dollars.

I recommend reading Summers’ article. It is inspiring. Of course, cynical old me tends to think that the reason the rich don’t pay their fair share of taxes is that they don’t want to. And nothing in politics has changed so that the government is likely to make them. But it is good to know that there are smart people thinking about this stuff. And that they want to solve problems and not just push ever more pain and suffering onto the poor.

H/T Mark Thoma

Tonight 60 Minutes reported on the Vatican Library. This is what I love about religion: history! And some of the illuminated manuscripts are stunning. Check this out, it is really good:

There is something very much wrong with us. You’ve probably seen the graph on the left (click on it to see it at full resolution). The green line at the top is the murder rate in the United States over the last 50 years. The red lines at the bottom is the murder rate in the other OECD countries. It really makes you wonder. I don’t have any answers except that there is something fundamentally wrong with us—and we have a lot of guns.

Dylan Matthews, who normally writes about economics issues (we are all of us a little distracted), wrote an article at Wonk Blog today that is half comedy and half tragedy, The 6 Craziest State Gun Laws. There are a few surprises in it.

One thing that surprised me is that four states allow concealed carry without any licensing at all. One of the states, Vermont, allows people as young as 16 to do so without their parents’ permission. But before you start dumping on Vermont, it would appear that they just have a strong libertarian streak in them. They also allow young women to get abortions without parental consent. (And yes, I do think that they’re not at all the same, but I was expecting some major hypocrisy.)

There is one bit of gun rights wackiness that I’d heard about before: employees bringing guns to work. The workplace is the employer’s property. In most cases, that settles the issue. But not when it comes to guns. Let’s suppose that you park on your boss’ property and you want to keep a gun in the car. You know, you might need it. Some one may dis you one time too many! Anyway, thankfully in 17 liberty loving states, you can just go to your car, get your gun, and put an end to that.

The most surprising fact in Matthews’ article was that only three states ban open-carry. (According to Wikipedia, six states ban it outright—but I think the article is out of date.) Thirty-five states allow open-carry without any kind of a license. You know what’s really great? Open-carry combined with alcohol! Look at the happy guy in this picture:

Most of the rest of the article is stuff we already know. You can murder anyone you feel “threatened” by. For the record, I tend to think that George Zimmerman will get off, because by my reading of the law he’s innocent. It looks like they got into a fight. I don’t know about you, but I always feel threatened when I’m in a fight. Therefore: not guilty!

And maybe you don’t know it, but I’m sure you won’t be surprised to learn that in about half the states, unlicensed gun dealers can sell to kids. So you can sell an eight-year-old a gun and that’s fine. But sell him a beer or a cigarette (Or let him vote!) and you’re going to jail.

Right here, I’m demonstrating the biggest problem in America: I’m so used to our gun lunacy that I make fun of it. I might be surprised at the individual acts of lunacy, but not the fact of it. And I remain deeply cynical that there is anything we can do about it. But I’m trying real hard.

Update (16 December 2012 6:34 pm)

David Roberts tweeted this:

People talk as though controlling/limiting guns is some sort of impossible dream. Plenty of other countries do it just fine. It’s doable.

— David Roberts (@drgrist) December 17, 2012

I want to believe this. But note: those other countries managed to create universal healthcare where as we are stuck with a new law that increases the number covered but isn’t universal. And it does this primarily by enriching the one part of our system that is most broken: insurance companies. And half the country thinks the new law is nothing short of tyranny. So just because other countries were able to do something good does not give me confidence that we can.

Andrea sent me this photo because she knows what a burden I carry being such a fascinating person. The expectations are so great. People call me up and say, “You’re such a fascinating person, entertain me!” I do my best. Strangely, people don’t accept my arguments that the history of English Language translations of Don Quixote is the most fascinating thing in the world. Fascinating in my own mind, I guess.

As regular readers know, I have problems with David Frum. A lot of problems. A whole lot of problems. But he’s so right about gun regulation.

He’s written a number of good articles in the past two days. The Myths that Enable Gun Tragedies. Every Day is the Day to Talk About Gun Control. And a number of other short articles.

But I’ve been most impressed with his Twitter feed. He’s been very smart, very humane, and very funny. Here he is ridiculing conservatives for the canard that it is too early to talk about gun policy by talking about the reaction to the sinking of the Titanic:

“1502 people have DROWNED! This is no time to insult their memory by asking why there weren’t enough lifeboats to save them.”

— davidfrum (@davidfrum) December 16, 2012

Here he takes on the defense against tyranny argument:

And if the reason you want semi-automatics is because you imagine bearing arms against the govt, I ask: why do you hate America?

— davidfrum (@davidfrum) December 15, 2012

For the record, these people do hate America. They are in favor of some mythical America that never existed. I’ve been meaning to write about this in depth. I basically have one thing to say: paying taxes is patriotic, so pay your fucking taxes.

(Note that Zaid Jilani tweeted, “Bush administration’s @davidfrum who helped launch war to kill 100,000s in Iraq acts like he cares about human life.” Frum is good on this issue, not good in a general sense.)

And here he is going after this ridiculous notion that we ought to arm teachers:

Last week: teachers’ unions are the enemy. This week: arm unionized teachers with semi-automatics to prevent gun violence. #thinking

— davidfrum (@davidfrum) December 15, 2012

To paraphrase Donald Rumsfeld, “We go to war with the allies we have.”