Max Sawicky

Max B. Sawicky is an economist and writer in Virginia. 

Recent Articles

The Wrong Way to Contrast With Trump on Trade

A new book tries to get progressives comfortable with the free-trade consensus. There’s a better solution.

Matt Rourke/AP Photo A container ship on the Delaware River in Philadelphia Open: The Progressive Case for Free Trade, Immigration, and Global Capital By Kimberly Clausing Harvard University Press Ever hear a Democratic politician evaluate Donald Trump’s trade policy? I defy anyone to sum up the objections. It’s quite unlike, say, tax cuts for the wealthy. We’re against them, he’s for them. The inhumanity of his immigration policies is not ambiguous. Yet on trade, your average, reasonably well-informed voter is as foggy on the issues as Trump. Trump seems to think our trade deficit makes the nation less wealthy, which is nonsensical . But there are real impacts from the trade deficit for the replacement of manufacturing jobs by jobs in the service sector. Middle-class workers are suspicious of trade for this reason, and they’re not wrong. So Trump’s simplistic focus on the volume of the trade deficit and the implied impact on the composition of...

The General Store of the U.S.A.

Do Walmart and Amazon's logistics triumphs reveal a path forward for a centrally planned economy?

People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism By Leigh Phillips & Michael Rozworski Verso This article appears in the Summer 2019 issue of The American Prospect magazine. Subscribe here . More and more people are talking about socialism, but nobody’s doing anything about it. If we’re talking about “nationalizing the means of production,” Bernie Sanders’s democratic socialist political revolution falls well short. Old notions of the state owning the “commanding heights” of industry and employing central planning to guide the economy fit a classic concept of socialism. Old-fashioned lefties are given to gripe that Bernie’s vision extends little beyond a beefed-up New Deal. An extension of the space that Sanders has cleared is the book by Leigh Phillips and Michal Rozworski, People’s Republic of Walmart: How the World’s Biggest Corporations Are Laying the...

Errors Of Commission

The President's Advisory Panel on Tax Reform is about to disgorge its recommendations. Early reports suggest that it will push for three general changes: Simplify the individual income tax by reducing or eliminating the Alternative Minimum Tax (AMT) and some deductions; Increase the exclusion of investment income from tax; Consolidate tax benefits for working families with children. The malignant pattern underlying the first two priorities is an increasing shift of the tax burden to labor compensation used by working people to finance basic needs -- in other words, to tax nothing but the wages that most people use to finance consumption. Simplify This Itemized deductions in the income tax are widely thought to be middle-class benefits. But while they are broadly distributed, their value increases with income; the higher your tax bracket, the greater your savings and the more you're likely to pay in mortgage interest, state income tax, and so on. Although itemized deductions are...

The Easy Money

The Internal Revenue Service estimates that some $350 billion in taxes owed to the federal government is evaded or otherwise unpaid every year. That sum, also known as the “tax gap,” nearly equals the current federal budget deficit. Of this $350 billion, enforcement efforts eventually recover about $43 billion -- and much more could be collected if the nation's tax-enforcement system were permitted to operate more effectively. Most of the tax gap stems from underreporting of net income -- reporting too little income or too much in the way of expenses -- under the individual income tax. The type of income in question is mostly business income to proprietors, partnerships, “S-corporations,” ordinary corporations, and the self-employed, as well as capital income (like dividends and capital gains) to individuals. A lesser part of it derives from wages and salary. Noncompliance with tax law takes other forms, too, such as the failure to file in the...

Debt and Taxes

The long-term insolvency of President George W. Bush's budget strategy is obscured by outrage -- otherwise justified -- over gratuitous and spiteful spending cuts. These cuts are real enough, but they are the battle the Bush administration would prefer to fight. To an important extent, the cuts are targeted at politically vulnerable populations. What the administration would prefer we ignore is the longer-term unsustainability of their policies, which also endanger our largest, most important, and popular entitlement programs. The fundamental problem is that federal revenues now are below 17 percent of the gross domestic product; since 2003, that proportion has been at its lowest since the 1950s. At the same time, total outlays are over 20 percent of GDP. That gap of three percentage points is sufficient to cause federal debt to rise more rapidly than GDP itself, generating a rising debt burden. The simple arithmetic: Debt as a share of GDP is now 38 percent. With the Congressional...

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