Greg Mankiw fudges on taxes

The former Bush economic adviser admits he could easily afford to pay the higher marginal tax rates he would face if the Bush tax cuts expire, but then says it would cost him in future investments.

AND, he cheats big-time on how he figures this:

Suppose that some editor offered me $1,000 to write an article. If there were no taxes of any kind, this $1,000 of income would translate into $1,000 in extra saving. If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now, when I pass on, my children would inherit about $10,000. That is simply the miracle of compounding.

Now let’s put taxes into the calculus. First, assuming that the Bush tax cuts expire, I would pay 39.6 percent in federal income taxes on that extra income. Beyond that, the phaseout of deductions adds 1.2 percentage points to my effective marginal tax rate. I also pay Medicare tax, which the recent health care bill is raising to 3.8 percent, starting in 2013. And in Massachusetts, I pay 5.3 percent in state income taxes, part of which I get back as a federal deduction. Putting all those taxes together, that $1,000 of pretax income becomes only $523 of saving.

BUT, the story is JUST supposed to be about the Bush tax cuts, not every tax Mankiw pays. (Hey, Greg, did you forget your property taxes somewhere?)

And, it gets worse from there, as he gets into the estate tax and such.

What a gasbag. Or douchebag.