taxes and incentives at work

For some reason I remembered yesterday that opinion by Greg Mankiwmankiw columns from 2010 where he warned us that the (then feared) tax hikes by Obama admin would diminish his personal incentives to work. He was talking very directly about his output as articles which we would miss: to quote, “I [would] supply less of my services[…;] because you are reading this article, you are one of my customers.”

I thought it would be interesting to check what the 2017′ Tax Cuts and Jobs Act did to Mankiw’s productivity. The effective tax rates for savvy operators (I am sure he can and does hire good accountants) went way down, and thus the incentives to work, as he surmised, increased a lot.

The picture on the right illustrate what (I admit, just a part, albeit arguably most visible part of) Mankiw’s output looks like, since 2010. Height of the list for each year is a graphic representation of Mankiw’s productivity. The red line indicates when tax cuts became the law; the timeline goes from bottom to the top. If you mistrust your eye, the average number of his columns went down from 7.7 per year pre tax cut times to mere 5 per year thereafter.

This is surely just one datapoint, and who knows what are the idiosyncratic challenges Mankiw faced over the last 3 years. But it is a fair metric to look at, as he himself offered it as a measure of social efficacy of a certain policy.

Judging by this metric, tax cut was not a success. Perhaps, those who diligently follow Mankiw’s output should insist that his tax rates,  should go up, so they enjoy more of their opinions, insights, revelations etc.

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