What could possibly be a better way to relax over Fall Break than some jokes about marginal tax rates? No really, I promise it’s funny (and it involves Stephen Colbert).
In case you’re not a regular reader of “Greg Mankiw’s Blog,” which I highly recommend, here’s a bit of background. Mankiw is a Harvard economics professor and former chairman of President George W. Bush’s Council of Economic Advisors. He is also the same Mankiw who wrote the textbook used by Princeton ECO 100 classes.
T Mankiw wrote a piece earlier this month in the New York Times about how marginal tax rates can affect our incentive to work. This is something taught in most introductory economics courses, and also something that many liberal politicians seem to forget. Put simply, if the next (marginal) dollar I earn at my job is taxed at a rate such that I would rather be doing something else, then I will choose not to work. The government loses the tax revenue, and society loses my productivity.
Stephen Colbert responded, as he is wont to do, with some satire. The kicker is a video produced by Respectably French, a sketch comedy troupe at Harvard.
So if you’re on your way back from the “Rally to Restore Fear,” here’s a little Colbert for the road. And if you’re not, here’s to the incentives of marginal tax rates.
Here is Mankiw’s article:
Here is Colbert’s video (if you just want the Mankiw bit, fast-forward to about 2:50):
Here is Respectably French’s response: