Funding for Science from the 112th Congress

mheslep

The valid case to make for the citizens that must pay the bills and at risk for having their savings inflated away by money printing and deficit spending is not that government jobs will be lost, but in the scientific value that comes out of these labs, as compared to the Universities, industry R&D (cf. Bell Labs), etc.

ParticleGrl

Industry doesn't do much fundamental R&D anymore, the focus has shifted much more to applied research. See,for instance, http://www.businessweek.com/magazine...5036681619.htm

Also, the DOE, NSF, etc fund University research, and part of grants to Universities end up in operating budgets. These cuts would not just effect science research, but would have a huge impact on university education.

Finally, we could have a discussion of the timing of these cuts- we might be out of the recession, but unemployment is still high. Meanwhile, companies are sitting on record amounts of cash rather than hiring, or expanding (Apple for instance is sitting on upwards of 50 billion http://technog33k.com/post/282201858...7-billion-cash and has been for nearly a year). Is it really the best time to put a lot more highly skilled on the job market? Keynes wasn't a complete idiot.

Edit: Also, dare I say it, maybe the more responsible thing to do would be to raise revenue? Maybe increase taxes?

Vanadium 50

No problem. The 2009 revenue from income tax was $915B. The deficit for 2011 is expected to be $1.5T. So all you need to do to balance the budget is to increase income taxes by a factor of 2.6. So, if you're in the 25% bracket, that would put you in the 66% bracket.

Still think it's a good idea?

ParticleGrl

Thats a pretty naive analysis. First, we SHOULD raise taxes across the board. The iron law of wages suggests that lower and lower-middle class workers will see their salaries rise to offset the costs anyway. However, we should also add higher tax brackets.

The highest bracket right now is something like 375,000, and something like 35%? Why not add a bracket at 50% for 450,000, 60% for 550,000, maybe up to 90% for making over a million. I can find no source close at hand for how much money that would raise, but it may be non-trivial (of course, it may be trivial, if anyone has good numbers, post them!) . A highly progressive taxation system would also act as part of a shock-absorber needed to help damp the boom and bust cycles.

Further, we need to think hard about how we tax unearned income. It doesn't matter what the top brackets are if people can count their salary as capital gains instead. Its a bit crazy that the third richest man in the world was only taxed at 17.7% in 2007 (while his receptionist was taxed around 30%) http://www.washingtonpost.com/wp-dyn...062700097.html

Vanadium 50

Of course it's naive. It's a single number. But it shows the magnitude of the problem. It's not that the government is spending 5 or 10% more than it is taking it: it's spending much, much more than it is taking in.

The naive proposal that you don't like has a 92% bracket for those above $375,000, and taxes up to 2/3 of capital gains. Your proposal is even less progressive than mine, and as such would require someone other than "the rich" to pay a larger factor than my 2.6 to make up for it.

chiro

Do you honestly think the wealthy would put up with that? They would move either their assets or both themselves and their assets somewhere more "encouraging"

caffenta

Yeah... We'll be dumb as bricks, but we'll have them big guns, so it's all good.

lisab

Where else in the world has low taxes, and is safe?

chiro

Read this:

http://www.rediff.com/business/slide...s/20110121.htm

I know most people don't want to live on an island in the middle of nowhere, but you can't argue somewhere like Switzerland, Lichtenstein, or Luxembourg.

Also note that many people that have their wealth offshore don't actually live in these safe havens.

Astronuc

Maybe a few of these places -
http://en.wikipedia.org/wiki/Tax_haven#Examples

russ_watters

That's a misleading analysis that includes her social security tax in the calculation. Apparently, Buffett isn't above propagandizing.

That said, a capital gains tax increase is probably inevitable. I go back and forth on it and would like there to be a way to provide an exemption for those using investments to save for retirement vs those using capital gains as regular working income.

ParticleGrl

Why shouldn't you include her social security tax in the calculation? Even still, the remarkable thing to me is that Buffet is only paying 17.7%.

Generally we tax income more than wealth. If people want to be invested in US companies and earn income in the US, they'll pay taxes to the US. We can use that tax revenue to help build the infrastructure that we are unfortunately letting crumble. http://www.scientificamerican.com/bl...ing-2009-01-28 If our infrastructure crumbles, it'll take more than low capital gains to bring investment to US businesses. Businesses need strong infrastructure and well educated employees to thrive.

humanino

You are completely right about that, it is the most relevant question, and eventually it is a political choice. I can bring up some points for case for the lab I work in, concretely. For the entire country and the other labs, I do not feel competent. There is just so much to tell. Neither will I try to convey that science itself is a valuable enterprise, I mean the actual scientific output of the fundamental research conducted is part of a bigger, universal story which is one of the driving forces behind technical progress, that is improvement in our quality of life. It is just too slow a process for this argument. I just mention that to me this is the most important aspect.

So more concretely.

Every week we have high school students coming in to participate in fun demonstrations of science. I think one the main goal is to stimulate them out of boredom, and let them know that any one of them could become a scientist if they are motivated. Even for the vast majority of them who will not become scientists, it seems valuable to me. In addition, every other month or so, we have science fairs, science contests, public seminars, or just open houses. We meet with the general public and try to get everybody to contribute in those communication efforts. Not only do we hope to have them support our activity, but we hope to raise some interest, some curiosity, fascination. This may seem corny, but imagine that someone shows you a rainbow for the first time in your life, and explains to you how it works, even maybe to such an extent that you can then do it yourself at home, or at least relate this fascinating phenomenon to your daily life. The hope is to get people to share this passion, realize the link with their daily routines and appreciate how important such an understanding is.

Some other concrete facts that they can learn relates to the significant portion of the staff which works in applied research. There are so many activities that it is difficult to summarize. A few examples could include security screening at the border, and I am not referring to TSA, but rather to find ways to screen the innumerable containers making it from boats for instance; recent progress medical imaging devices which have already saved lives; a special laser unique in the world in terms of optical range and power, with vast applications similar to what one can do with synchrotrons; material science, vacuum technology, cryogenics, plasma science, surface analysis... the list goes on and on. They must be efficient enough since they are judged by the number of patents they get.

This applied research center does not exist without the rest of the lab. For one thing, many among its staff obtained their PhD doing fundamental research and then turned to applied research (there are more opportunities). By the same token, every summer dozens of undergraduates come to learn at the lab. The last one I had learnt some physics, but was clear that he wanted to go into biotech from the beginning. He now has rudimentary skills in programming and statistical analysis. Acquiring those in a couple of months was quite efficient. I am convinced they they will be very useful in his future endeavors.

There is of course all the technology that comes out of computer science. From GPUs to the computing Grid, high energy physics is still at the leading edge in driving these progress. That fact dates back to the first computers and goes through the internet protocols for instance.

Many young PhDs who worked with DOE but decide to make money also go into financial analysis and market models.

So I am getting tired, and again it is a political choice. I doubt that a well-informed politician would seriously deny that the national labs under DOE are essential to innovation in this country, in the sense that there would be another cheaper and more efficient way to fulfill their social role.

humanino

Although I do not believe he will be successful, I hope Sarkozy's efforts to regulate those to some extent will eventually damp the leaks, which for the US are considerable for instance.

russ_watters

You shouldn't include her social security tax in the equation because it counts her tax while not counting the benefit she will receive from it (because it hasn't happened yet). The stated purpose of SS is a forced-savings retirement fund, so the money she paid-in is still essentially earmarked for her.

Let me put it another way: when she retires, her "tax burden" will be something like negative 300% (if SS is taxed around 25%) while his will always be positive (because he'll be living off his investments, not his social security). Looking at Buffett's statement with blinders on ignores that reality. Rather than cherry-picking an example who'se logic generates (but ignores) such a lopsided opposing counter-example, it is better to eiminate the issue by not counting the SS tax.

If someone receives food stamps or welfare or other government assistance, that is counted against their tax burden (that's why about half of Americans have zero or negative tax burden). It is disingenuous to ignore benefits she will be receiving just because they haven't happened yet while counting the money she paid-in to receive those benefits.

Vanadium 50

Except that more than 90% of K-12 education costs are not paid by the federal government.

Saying "this program is more important than that program" misses the magnitude of the problem.

If you want to balance the budget by raising taxes, you have to raise income taxes by a factor of 2.6. Of course, you can make some people pay more so others can pay less, but the highest tax bracket would be 92%, so there's not much room to increase taxes on people making more than $350K.

If you want to balance the budget by cutting spending, you have to cut the entire discretionary budget, plus $300B. "Discretionary" includes most of what we think of as "the government" - the Army, embassies, the FBI, NASA, the national parks, etc. Even science spending. It all has to go, and it still won't be enough.

This is what the arithmetic says when you have $915B in income taxes, a $1.2T discretionary budget and a $1.5T deficit.

nismaratwork

You know, I was just saying the other day how much I missed the good old days of polio and unforcasted tsunamis.

I love it... "innovate you fools, and do it like they did panning for gold: with syphilis and by luck and attrition!"... "Btw, we're slashing the mining budget, so take this pan and find a river punk!"

I feel ill.