Broadsheet

When I wrote this week about Anthropic’s announcement that all Claude models, worldwide, would soon begin “watermarking” everything they generate, including text, to comply with this EU regulation, we were left to speculate how this was going to work, because Anthropic offered not even a vague description of how it would work — despite the fact that the title of the announcement was, absurdly and insultingly, “How Claude Marks AI-Generated Content”.

My initial speculation was that maybe they’d hide invisible non-printing Unicode characters in the text. Just spitballing. Turns out that’s not what they’re going to do. What they’re going to do is apply a form of steganography, where the choice of words (or other token output) at inference time will leave fingerprints that can later, maybe, be detected probabilistically.

I initially guessed “invisible characters” not because I didn’t think of the semantic word-choice technique, but because I was a fool who took Anthropic at its word in their description of what they would do. Their original support document claims:

When a supported Claude model generates text, it weaves an imperceptible watermark directly into the text itself. You won’t see it, and it doesn’t change the meaning, quality, or readability of Claude’s response.

They say “imperceptible” and “doesn’t change the meaning, quality, or readability”. Their words. Not almost imperceptible. Not slightly changes the meaning, quality, or readability. That made sense to me, because that’s absolutely what I want — nay, demand — from any tools I use personally. It’s unacceptable for a tool to sacrifice an iota of clarity, coherence, meaning, quality, etc. for the purpose of embedding hidden clues within the text to suggest its provenance. That’s what I would and will demand. And Anthropic’s (original) support document unambiguously claims that’s what their system will enable. So if that were true, I couldn’t see what was left other than hiding invisible characters within the text.

My error was believing Anthropic that their system wouldn’t adulterate and corrupt the semantics of the text their models generate. That is in fact exactly what they plan to do. I should have my head examined for believing a single word of a document titled “How Claude Marks AI-Generated Content” that doesn’t explain, at all, how Claude marks (or will mark) AI-generated content.

How It’s Actually Going to Work

Yesterday, on an entirely different website than the original “How Claude marks AI-generated content” article (the one that didn’t explain anything at all about how it works), Anthropic published “How Claude’s Text Watermark Works”, which does actually explain in layman-accessible terms how it’s going to work. I will return to Anthropic’s new highly euphemistic and slightly misleading description below.

There’s a bunch of research on this topic, some of which I have also linked to below. But the very best description of the general idea behind the technique is an interactive essay by James Padolsey, “How AI Text Watermarking Works”. It’s a wonderfully cogent read, and the interactive elements splendidly illustrate the main concepts. A+ work. If you have any interest in this at all, I dare say you must read — and play with — Padolsey’s piece.

But here’s my stab at a layman’s high-level summary. If you toss a coin N times and note the results, you can determine with a degree of certainty whether the coin is fair or biased. LLMs are, in their popular incarnations, non-deterministic. Ask the same question of the same model and you often get at least slightly different answers. Maybe the same meaning, but different phrasing. At each decision point for generating the next token, the model makes a choice. With these semantic watermarking techniques, they make different choices for some tokens based on word lists that could be called “green” and “red”. At each decision point, they’re a little more likely to pick a word from the green list than the red list. That doesn’t mean they never choose words from the red list. Just that they’re less likely to than they would if the adulterated marking technique weren’t in place. (Same way that a crooked 51-49 coin will still land “wrong” side up 49 times out of 100 on average.)

Words or word phrases are sorted into the green and red lists deterministically on the fly, at each “next token” generation point. So sometimes a specific word will be on the green list, and other times it will be on the red list. Someone with the secret key can determine which list a word will be on at each token generation point (which is how the watermarking is detected); those without the secret key cannot. This means there will never be a list of words that Claude prefers or eschews.

With coin flipping, the higher N is — the more times you flip — the more confident you can be that the coin is fair or biased. So too with this semantic watermarking. The more words in the text, the more accurate the analysis will be that the text was generated by a specific AI model or not. With too few coin flips, you can’t achieve any confidence at all regarding a coin’s fairness. With too few words (or tokens), there’s no way to achieve any confidence whether a string of text was AI-generated or not.

Given a string of text to examine for signs of a specific watermarking system, if there are more words tagged as green and fewer tagged as red than would otherwise be expected, the text can be flagged — with some degree of confidence — as having been generated, or merely modified, by the AI system that applies the specific secret-key watermarking system. The amount of confidence in the determination will obviously vary, significantly, based on the size of the text string and randomized weights given to words on the green and red lists. But only Anthropic will be able to determine if text was seemingly generated by Claude, and Anthropic will only be able to detect the watermarks that are applied by Claude. Claude can’t detect the hidden watermark signals generated by, say, Gemini, and Gemini can’t detect the hidden watermark signals created by Claude, because each implementation is predicated on secret keys held only by the LLM provider.

Objections to the Technical Premise

One of my fundamental problems with this is that no two synonyms carry the exact same meaning. “He leaped at the chance” and “He jumped at the opportunity” are very similar sentences expressing the same general sentiment, but they are not the same. The exact words we choose when writing matter. I want any LLM I use to choose the very best, most precise words at every single decision point. An obvious constraint that I accept is time and computation. Within the constraint of executing inference quickly, and at a certain cost per token, I want the best words. This constraint matches human writing. I could surely write a better column by taking longer to write it. I write with a sense of how much care I should put into every word and punctuation choice I make. I take more time with certain paragraphs, sentences, or even individual word choices when my gut feeling says I should.

In other words, these are necessary trade-offs. These factors are all in my interest: speed, cost, quality. Ideally I would like perfect writing, at instantaneous generation speed, at zero cost. None of those things are possible. Computation is not free of charge (and cloud-based LLM inference with leading models is actually expensive). Inference is not instantaneous. And great writing, whether natural or artificial, can only approach perfection.

The idea that anything other than my needs should factor into the generation of text for me is patently offensive.

This isn’t just about text one might generate with the intention of passing it off as their own natural work. This isn’t even about LLM proofreading of work written by hand. Anthropic is saying that all new Claude models are going to adulterate every single bit of text longer than 200 tokens (~150 words) they generate, including everything it presents to its users to read. So even in a private conversation between a user and Claude, which will never be read by anyone other than the user, Claude will begin making word choices in the name of marking its output in statistically predictable ways rather than maximizing clarity and precision.

Even today’s so-called frontier models are already decidedly lacking in lucidity. Claude, ChatGPT, Grok, et al. are “better writers” than most humans and produce better prose than the median human. But: no shit. Most people are terrible writers. The “average person” is pretty stupid and half of all people are stupider than that. And there are many smart, interesting people who are miserable writers. So as impressive as LLMs are, the bar is low. The best writing I see come out of these models is worse than anything I would choose to read for pleasure. And now Anthropic is saying they’re going to make it worse, on purpose, for purposes that do not benefit me in any way? Even if only slightly worse?

Get fucked.

Objections to the EU Regulation

Speaking of objections, the relevant EU regulation motivating all of this, “Code of Practice on Transparency of AI-Generated Content”, is red-tape nanny-state pipe-dream nonsense. Here’s Ben Thompson’s summary from a paywalled Stratechery update this week:

The regulation applies to text longer than 200 tokens.

The provider must mandate in their terms-of-service that users not remove the watermarking.

The solution should be robust in terms of evading “typical processing solutions” like screen shots, scanning and OCR, copy-and-pasting, translations, etc.

Taken literally, compliant LLM terms of service must forbid users from rephrasing the output from models that comply with this regulation, because the word choices are the marks. But it’s not the European Union that is trying to impose their absurd, impractical, witch-hunt-fueling regulation on the entire world. That falls on Anthropic.

Complying with this, particularly with regard to text, is only going to create problems for honest users. Dishonest users attempting to pass off AI-generated text as their own writing (students, employees, whoever) will simply circumvent detection through non-compliant AI paraphrasing tools.

James Padolsey — whose interactive visual explanation of how these schemes work I linked to above — explains this in a post titled “Anthropic’s Weak Watermarks Appease a Weak Law” (which, if it rings a bell, I linked to in a standalone post earlier today):

The same thought that led to this law could have applied to calculators at the time of their inception, had their outputs revealed themselves through artefacts. Thankfully, a sum borne of the brain is treated no differently from one produced by a calculator. Likewise with spellcheckers. To make assistance suspect only once the tool becomes capable enough to compose a whole sentence is not a principled boundary. It is a moral premium placed on difficulty itself.

Anthropic has nevertheless chosen a blanket, model-level implementation that appears broader than the law’s minimum requirement. That may be convenient compliance engineering, but it discards distinctions the law expressly attempted to preserve. The result is a signal broad enough to implicate harmless and assistive use, yet fragile enough to be removed by a motivated person through substantial recomposition. It risks concentrating suspicion on ordinary and assistive users while remaining weakest against deliberate deception.

Padolsey is the creator of Declaude, a delightfully simple web app that allows you to “Paste in AI-flavored text and get the same content back as plain prose”. Declaude’s original purpose is cleaning the saccharine Claude personality stink from text (whether it was created by Claude or any other LLM), but, if Anthropic persists in its stated plan to begin adulterating all text Claude generates, Declaude will also serve as a copy-paste single-extra-step way to eliminates those marks. Declaude is interesting and useful already, but it exemplifies how ill-considered and futile this EU regulation is when it comes to prose.

Google SynthID

Google has a watermarking system in place that they call SynthID, which they apply to AI-generated images, video, audio, and text. I’m concerned in this article only with text. With multimedia, embedded watermarks can be metadata within files, and truly not affect the experiential quality of the work when viewed or listened to. With text, we are talking about the actual words that are chosen. From the “AI-generated text” section of Google DeepMind’s own description of SynthID:

We’ve expanded SynthID to watermarking and identifying text generated by the Gemini app and web experience. Large language models generate text one word (token) at a time. Each word is assigned a probability score, based on how likely it is to be generated next. So for a sentence like “My favorite tropical fruits are mango and…”, the word “bananas” would have a higher probability score than the word “airplanes”. SynthID adjusts these probability scores to generate a watermark. It’s not noticeable to the human eye, and doesn’t affect the quality of the output.

In a group chat, a friend of mine quoted the above, and I responded that if a chatbot wrote “My favorite tropical fruits are mango and airplanes”, I’m pretty sure I’d fucking notice. Another friend then responded with this:

Days later, that still cracks me up.

But Google’s absurd description puts the lie to their own claim that it isn’t noticeable, and it serves to show just how little regard the people behind these generated-text fingerprinting schemes have for the actual craft of writing. Of course bananas has a higher probability score than airplanes, because airplanes aren’t fruit. But what about pineapple? Should the sentence complete to “mango and bananas” or “mango and pineapple”? That’s a good question, and the only acceptable answer for why an LLM should choose bananas instead of pineapple (or coconut, or guava, or papaya...) is that it has determined that it’s the best fit for the intended meaning, tone, and sentiment of the text. Not because bananas is on the watermarking “green” list and pineapple is on the “red” list, even though pineapple might be the better fit. Google’s own supposedly jocular description of how SynthID works in fact captures how the scheme perverts the text it generates.

They’re saying you won’t notice because if it only chooses bananas over pineapple for these fingerprinting purposes, well, they’re both tropical fruits and who cares. But it’s utter nonsense that the difference is “not noticeable to the human eye”. The semantic difference between banana and pineapple is just as noticeable to the human eye as the taste of the two are to the human tongue.

If it did produce “My favorite tropical fruits are mango and airplanes”, it’d be incredibly stupid, but it wouldn’t be offensive because we’d all recognize that something completely off-key happened. What’s offensive is that with a system like SynthId in place, where the fingerprinting decisions are motivated by a secret key, we have no idea whether it completed to “mango and bananas” because bananas was determined to be the best next token, or because bananas is in the “green” bucket of words. It calls every single word choice into question.

Here’s a paper published in Nature where Google’s team behind SynthID published their work, after putting it into production with Gemini (née Bard):

We analysed approximately 20 million watermarked and unwatermarked responses and computed the thumbs-up and thumbs-down rates (both as a fraction of the total number of thumbs-up and thumbs-down feedback received). We found that the thumbs-up rate for the two models differed by 0.01% (with the watermarked model being higher); and the thumbs-down rate differed by 0.02% (with the watermarked model being lower). We found both of these differences to be statistically insignificant, and well within the 95% confidence intervals.

From this experiment, we conclude that over a wide variety of real chatbot interactions, the difference in response quality and utility, as judged by humans, is negligible. Subsequently, non-distortionary SynthID-Text has been productionized and is currently watermarking responses in Gemini and Gemini Advanced. To the best of our knowledge, this evaluation represents the first systematic watermarking investigation of its kind within a large-scale production system.

To this I say:

Gemini/Bard’s thumbs-up/thumbs-down buttons are not a good experiment for evaluating the effect on quality. If a chatbot tells me “My favorite tropical fruits are mango and bananas” instead of “mango and pineapple”, I’m not going to give the response a thumbs down because of the fruit it chose. I’d give it a thumbs down if it said “airplanes”, yes, but that’s a strawman. (The paper in Nature even uses “My favourite tropical fruit is ...” as an illustration, but in the paper, the only four next tokens considered are, in order of probability distribution, mango, lychee, papaya, and durian. No airplanes. And, conveniently, in the paper’s example, the “winner” of the watermarking “tournament” just happens to be mango, the one that would have been selected as the best if the watermarking weren’t in place.)
A “difference in response quality and utility, as judged by humans” that is “negligible” does not mean imperceptible. What they really mean is that it’s only slightly worse and that everyone is either too stupid to notice or too indifferent to care.
It’s widely considered that Gemini is behind ChatGPT and Claude in quality. Perhaps the fact that they’ve put SynthID-text into production is one of many reasons why. I personally agree that Gemini’s prose is inferior. Maybe the use of SynthID has nothing to do with the fact that I, along with the general public consensus, consider Gemini to be a second-rate chatbot — but in that case, maybe it’s the fact that Gemini is a second-rate chatbot that makes the difference “negligible” when Google started mixing in SynthID-motivated tokens in its results. It’s a lot more likely that your restaurant customers won’t notice that you replaced your regular coffee with Folgers Crystals if your regular coffee is second-rate to start with.

Anthropic

Now, finally, back to Anthropic’s new “How Claude’s Text Watermark Works”, published yesterday. I have some comments.

To summarize:

We use a method of watermarking that does not have any practical impact on the quality or content of Claude’s outputs;

The difference between watermarked and un-watermarked text will not be distinguishable to readers;

Translation: Specific words do not matter and we don’t think anyone reads anything closely.

Nothing is added to the text and there are no hidden characters;

This would have been worth clarifying at the outset.

Watermarking won’t be specific to Claude. As of August 2, the EU requires AI providers serving its market to mark AI-generated content. Other major model developers have signed the same Code of Practice and will be implementing their own watermarks.

No other AI provider has stated that they will apply such marking, adulterating all generated text, outside the EU.

Take the sentence “The weather today was cold and…”. The next word is very unlikely to be “sugary.” But it is quite likely to be “overcast” or “grey.” Under most circumstances, it doesn’t matter much to the reader which of these latter two words the model ultimately chooses — the meaning of the sentence is largely the same either way. In cases like this, the choice is settled by a random number.

Arguing that grey vs. overcast “doesn’t matter much to the reader” is the crux of my argument that this entire endeavor is a perverse adulteration of what it means to write — or to read. That it’s subtle in some ways makes it more perverse, because it’s sneaky.

In internal testing, we’ve seen no impact of watermarking on the content, level of creativity, or readability of Claude’s text. In the SynthID-Text paper, which introduced the technique we use, Google DeepMind tested this impact by serving a model that used watermarking to a portion of their Gemini traffic and comparing thumbs-up and thumbs-down ratings. They found no statistically significant differences from the unwatermarked model. And in a controlled study, human raters comparing watermarked and unwatermarked answers side-by-side saw no difference in quality.

See above for my argument that this thumbs-up/thumbs-down data is absolutely worthless in evaluating whether the SynthID-style word-bias watermarking makes text worse. By definition it must make text worse, unless the underlying LLM model’s scoring is wrong, because the nature of the watermarking algorithm requires it to sometimes increase the probability of selecting a worse word choice and decrease the probability of selecting the model’s best choice. It’s only a question of how much worse. What Google’s thumb-counting data shows is only that it isn’t so much worse as to make Gemini users click the thumbs-down button.

Watermarking doesn’t change the meaning or experience for the person reading it, but if you wanted to check after the fact whether the text was likely generated by Claude, the watermark allows you to do so.

No, it does not. Because the entire scheme is tied to secret keys held only by the AI provider, it only allows Anthropic, not “you”, to check anything.

When Claude proofreads text written by a person, what it gives back has generally only been lightly edited; because nearly all the words are the person’s, there’s very little (if anything) for the watermark to attach to. Depending on the length of the text and how heavily Claude has edited it, those changes might not be enough to make Claude’s involvement detectable. The more Claude writes, the more decisions it has to make, and the more space there is for a watermark.

Translation: No one can ever again use Claude for proofreading their own prose unless they’re willing to risk that the whole thing might be flagged as having been generated by Claude.

For example, once the model has written “2 + 2 =”, there is a very clear best choice for the next token (if the model is completing the sum, there isn’t an answer that’s equally as good as “4”; if it’s talking about George Orwell’s Nineteen Eighty-Four, there isn’t an answer that’s equally as good as “5”). The “nudge” of the watermark wouldn’t be applied here. For the same reason, code — which in very many cases has to be exact — has generally less watermarking than some other forms of text.

Having said that, in areas where there is an arbitrary choice between particular words or terms within the code, the watermark can be used, such as comments within code. But by definition, it will have a negligible effect on the actual code produced.

Translation: We value precision in programming code; we do not in prose.

And it is exceedingly rich to cite George Orwell’s Nineteen Eighty-Four, approvingly, in the context of justifying a text adulteration scheme premised on the notion that specific words do not matter. I mean what the actual fuck? Orwell!

Lastly, as to why they’re doing this:

We’re implementing watermarking to comply with the EU AI Act. Anthropic, along with several other major AI model providers and around 190 total signatories, signed the EU Code of Practice on Transparency of AI-Generated Content in July 2026. This requires AI system providers to use methods of “marking” AI-generated text. We’re applying watermarking globally at launch because we don’t yet have a durable way to scope it by region.

This, from a company that the Financial Times just reported is weeks away from an IPO with an intended valuation of $2 trillion, which would make it one of the 10 highest-valued companies in the world — as of today, placing it at #7, between TSMC ($2.2T) and Broadcom ($1.9T).

This leaves us to believe that one of the following must be true:

It’s perfectly reasonable that a technology company valued on par with Amazon and TSMC is technically incapable of complying with an EU regional law only within the EU itself.¹ Not a cause for concern at all.
Anthropic is in over their heads, wields shockingly little control over their own tech stack, and their imminent IPO is likely to be remembered only as a new high-water mark in the manic global AI bubble.

Also, what happens if another major global market makes it unlawful for AI to secretly watermark generated text?

OpenAI

From an OpenAI support document titled “Provenance Signals (Content Credentials, SynthID) in OpenAI-Generated Content”:

Consistent with our commitments under the European Commission’s Code of Practice on Transparency of AI-generated content, our goal is to expand provenance signals to all modalities including text, so customers and developers have clear ways to meet their own transparency obligations as standards and tooling continue to mature.

There’s a lot of wiggle room in this brief statement, and it could just as well mean that OpenAI models will only adulterate text with fingerprint markers when users or developers ask for it. Or that it will only be mandatory for users in the EU. If I were at OpenAI I’d go hard on this and publicly say that ChatGPT will never watermark text it generates unless you ask it to, and that if you want tools that secretly work behind your back without telling you how they work to flag your words in ways you can’t see, go ahead and use Claude.

As a human who has had to wrangle with EU regulations in the past, I am abundantly clear what’s involved in the laborious bureaucratic process. I can guess what threats Anthropic is facing. However, this is a tone-deaf, clumsy, and alarming opening salvo in their watermark strategy. [...]

My writing is my work, and Anthropic’s current strategy is aggressively writer-hostile.

Jeff Gamet, “Anthropic’s Claude Watermark Is Akin to an AI Poison Pill”:

To be clear, the watermarking is embedded in pretty much any text Claude touches. Along with text Claude generates, it also applies to text it processes, such as proofreading and summarizing. I expect we’ll see too many inaccurate accusations of using Claude to write documents where the content was human-written, but AI-proofread.

The watermarking sticks with documents through copy-and-paste, too. Imagine copying text from a blog post or email only to have what you wrote tagged as potentially AI-generated. In fact, that could very well happen with this post. I personally write all of my content without AI tools, but I copied the quote at the top of this piece directly from Anthropic’s website. Does that mean what I wrote here will show as AI-generated? If they used their own models to generate or edit what I quoted, then the answer is very likely “yes.”

One of the papers published at ArXiv I cited above claims that such watermarking even persists when an article of text originally generated in English is translated into German.

Secrets are the poison here. When only Anthropic holds the secret keys that both produce the watermarking and perform the probabilistic detection of those marks, we’re all left to wonder. To wonder if what we’re reading is secretly watermarked, what we’re quoting is secretly watermarked, and whether what we ourselves are writing will be unjustly accused of being AI-generated based on secrets we don’t know and can’t see. Poisonous is exactly the right word.

Or should I say toxic? Or airplanes?

This is the side that noted savant Jim Cramer is on. ↩︎

For all my interviews and more, subscribe on YouTube.

. . .

TRANSCRIPT:
Paul Krugman in Conversation with Vanessa Williamson

(recorded 8/12/26)

Paul Krugman: This week, I’m talking to Vanessa Williamson, senior fellow at the Brookings Institution and author of a fantastic short history of taxation called The Price of Democracy, which is, I’m pretty sure, an allusion to Oliver Wendell Holmes’ “the price of civilization,” but a very different take. And because I’m so interested these days in tax policy, I thought I could talk to Vanessa to get a sense of a lot of these issues where I am very much an amateur and she’s done the homework. So, hi!

Vanessa Williamson: Hi. Thank you so much for having me.

Krugman: So, yeah, let’s talk about the title of the book first, because obviously the famous Oliver Wendell Holmes quote, which I’ve seen in slightly different versions, was basically saying, you know, if you want police and roads and public order, then you need to have taxes to pay for it. But you’re making a much broader point there. Why don’t you explain why you say it’s the price of democracy?

Williamson: Yeah. So I love the Oliver Wendell Holmes quote, that it’s the price of civilization. But as I was writing this book, which was just going to be a history of taxation in America, it struck me that taxation is really more than the price of civilization—it’s the price of democracy. And that’s because democracy isn’t just being able to vote; it’s people having the power to actually make change to their government. And if the government doesn’t have enough money to act, then, even if you can vote, it’s inconsequential.

Historically, this is a very deep story. Taxation and representation really do develop together. This goes back all the way to 1215 with the Magna Carta, when King John had been taxing at a higher level, and the barons demanded that if there were going to be extraordinary taxation, the king had to get the general consent of the realm.

Krugman: Right.

Williamson: And that was a very early iteration—an attempt to create what eventually became Parliament. So the very origins of representation in our historical tradition are really about taxation, because what you find is that when rulers want to tax, they become dependent on the taxpayers. And it builds a connection between the ruler and the ruled, and it gives the taxpayers power.

I think commonly the story you hear in this anti-tax mythology that’s around is you’d imagine the taxpayers use that power to avoid taxation. The opposite is true: when representation develops, taxes go up because, of course, the taxpayers can now have a say in what the government is doing. So taxation and representation developed together historically, and they developed together cross-nationally. The freest countries today are high-tax countries.

Krugman: That would be, above all, the sort of Nordic countries that are very high-tax?

Williamson: Sure, but it’s true across the board. Even highly developed economies that are authoritarian have lower taxes than you would expect given their level of development. And that’s because authoritarians are simply not very good at raising taxes. They much prefer other forms of revenue, whether that’s a gold mine, the spoils of war, or fees and fines that they can apply to their political opponents. There are just other mechanisms that do not make them dependent on the rank-and-file people of their country.

Krugman: Okay. And I want to come back to the high-tax countries in a minute. But one point that you make at several points in the course of the book is that the idea that taxes are okay is very much a challenge to wealthy people saying, “Well, my wealth is mine, and nobody has the right to take some of it.” And there’s a statement of principle that says, “Well, okay, but you too are subject to the laws of the republic and must pay.” Right? That seems to be a pretty big part of the story.

Williamson: Yeah. There’s this long-standing tension, and it’s not all wealthy people or all the elites at any time in our history, but there are often some who are very, very wealthy. Fundamentally, they don’t like to see themselves as citizens, right? They like to see themselves as masters. The first group of people who felt this way, of course, were the slave owners who were desperately opposed to taxation. The anti-tax components of our Constitution were all put there as part of a compromise with slavery, right?

Krugman: That’s a good point.

Williamson: Yeah, the slaveholder class was afraid of mass democracy, even if only of propertied white men. So we get the Three-Fifths Clause. And they were specifically afraid that if every propertied white man could vote, what you would end up with is abolition by taxation—that we would tax slavery out of existence. And so that’s why you see these anti-tax measures in the Constitution.

It happens again in the Gilded Age. You see Rockefeller claiming that high graduated taxation is the most fundamental threat posed by democracy. You see efforts to roll back suffrage rights during that period, even in Northern cities. So it’s a very long-standing fight between the mass public and the kind of things democratic governments usually want to do—roads, schools, and things of that sort—and a fraction of the elite who are willing to accept democracy as long as that democracy is too poor to threaten their power.

Krugman: Wow. Okay. I’ll come back to the history shortly. One thing that I probably don’t talk about enough when writing about these things, but it’s something I certainly always taught when teaching a class on the economics of the welfare state, is that the high-tax, generous welfare state countries don’t have highly progressive tax systems. The state of the US debate always seems to be about, “Shall we raise taxes on the wealthy?”, which is an important concern. But places like Denmark or Sweden or, just in general, European welfare states, have high taxes sort of on everybody.

Williamson: Yeah. That’s exactly right. I mean, that’s also how we pay for Social Security and Medicare. Big social safety net programs are typically funded by broad-based taxes.

Krugman: Right.

Williamson: I think it’s really important to remember all the things that taxes do. We really focus on the redistribution part. And it’s so important, absolutely, especially now with the incredible consolidation of wealth in this country. We focus on the straightforward redistribution part of the top rates, that kind of thing, or whether we should have a wealth tax. That’s important, you’re exactly right. But at the same time, we just need a lot of revenue. Traditionally, and in terms of long-term sustainability, that’s something that we fund by taxing everybody. But that’s part of citizenship.

One of the things that is part of that anti-tax mythos that you hear all the time—people are under the impression that Americans hate paying taxes. It’s just not true. People are quite proud to pay taxes, and they’re very willing to pay taxes for things they think are valuable—things like Social Security and Medicare. So I think the fact that we’ve shied away from asking people to support their government by paying taxes at a federal level has really weakened the civic rhetoric of this country. I think it’s left us in a terrible position. If we can’t convince people that their government is worth paying for, how can we convince them that democracy is valuable?

Krugman: Yeah, indeed. There are several episodes that I actually was ill-informed about. I kind of knew the numbers, but not at all the political history. There was this period, basically under the New Deal and through World War II, when the idea of broad-based taxes—that lots of people pay into social insurance programs, but also a broad-based income tax—really became established. That came as kind of a surprise, that people were willing to accept it, right?

Williamson: Yeah. Before World War II, the income tax was what was called a class tax. It was paid only by the very wealthy. And the country relied far more heavily on tariffs. By the way, the tariffs chapter of my book is not what I expected as I was writing it to be—as relevant as it ended up being. But anyway, most people contributed to the federal government through the higher prices that resulted from tariffs, and the income tax was a tax on the very wealthy.

Well, World War II comes along. We’ve got to pay for that. We need a ton of money, and they decide to go with an income tax. Now, we’re talking about a time when people didn’t have pocket calculators. A lot of people hadn’t been to high school. And suddenly they’re going to have to fill out a paper form and pay their taxes. And it’s not going to be withheld in the first years.

So, there was a lot of fear in the Treasury Department: Could Americans do it? There were these incredible campaigns to let people know about the income tax and to help them pay. There was a song by Irving Berlin called “I Paid My Income Tax Today.” There were Donald Duck cartoons that played before movies. Donald Duck figures out how to fill out his taxes in the cartoon.

So it was this huge effort, and in the end, it worked, right? Americans paid their taxes. We paid a much larger fraction of the bill for World War II than we otherwise could have. What’s especially amazing is how positively people felt about those taxes. They were voluntary contributions to the Treasury, made out to Uncle Sam. Polls suggested that 90% of Americans thought it was fair, because they saw it as a worthwhile thing to support the United States.

Krugman: I guess the big increases in taxation have always come around wars, right? World War I is really where the income tax comes in, even for the wealthy, and then World War II comes in. But that’s a complete change in attitude. I don’t know if you remember after 9/11, when Tom DeLay, the House Majority Whip, said that “nothing is more important in a time of war than cutting taxes.”

Williamson: Yeah. Extraordinary. It was the first time we fought a major war in this country without raising taxes. I think it speaks to the decline of accountability, that we stopped having that connection between the decisions of our policymakers and the costs.

Krugman: We used to say that America was kind of special, at least compared with a number of other advanced countries, in the fact that we were so successful in getting people to pay income tax, that there was a lot less cheating. I don’t know if you touched on it in the book—I don’t remember—but is that something that you think is explained by the history or by contingency, or is that something about the American character, at least what we used to be like as a country?

Williamson: That’s certainly an open question. But yes, American “tax morale” has always been high. That’s the jargon-y term for willingness to pay taxes. And that’s partly, I think, part of our civic culture. People see taxpaying as patriotic. If you ask Americans, “Is it every American’s civic duty to pay their fair share of taxes?”, you get over 90% of Americans agreeing, sometimes as high as 95%. I actually looked for poll data that showed equivalent levels of consensus. You have to ask things like, “Is Elvis alive?” or “Did we really land on the moon?”—just really out-there stuff. This is a shared belief.

The first time President Trump, in his campaign against Hillary Clinton, talked about not paying taxes being “smart,” this was a huge change of rhetoric. If you recall Mitt Romney saying he’d always paid 13% or 14% in income taxes, this was a huge change in rhetoric, and it didn’t shift American attitudes. Americans did not suddenly come to see cheating on your taxes as acceptable. They see it as wrong.

Krugman: One of the points you make along the way is that the public’s attitudes about taxes really haven’t changed that much over the years. I think the line used was that since the 1980s, the policy and the politics of taxes have changed, but Americans’ own attitudes have really not. Do you want to enlarge on that a bit—what you mean by that?

Williamson: Yeah. Clearly, we live in a startlingly anti-tax time. One of the two major parties sort of sees taxation as fundamentally bad and sees taxes as something that should always go down, at least for the wealthy. That is a historical oddity. In the mid-20th century, neither political party saw taxation as a particularly major issue. It was important, but it was technical. It wasn’t a major part of either party’s platform. That changes in the period after the civil rights movement, where again you see the rise of the kind of anti-tax rhetoric that is fundamentally a kind of anti-democratic rhetoric, and that grew more and more extreme over the following decades. That’s sort of where we are today.

The strange thing about that is, as our politics have become more extreme in so many ways, the politics of taxation have become more extreme, while the underlying views of Americans have been markedly stable. I think that speaks to the decline of the quality of our democracy, right? Because what happened was the politics became untethered from public views. Most Americans say that you have a responsibility to pay your fair share of taxes. Most Americans say that paying taxes is patriotic. If you ask people what their top concerns are about the tax system, their top two concerns for literally decades have been that corporations and the wealthy are not paying their share. The third is the complexity of the tax code. Somewhere below that falls the amount they personally pay.

On this issue and on many others, frankly—you see it on things like gun control or the minimum wage, for example—the attitudes of most people are simply not a good predictor of our politics. I think that speaks to a real erosion of our democracy.

Krugman: So when you say after the civil rights movement, there are two interpretations. I think there’s some of both in your book, The Price of Democracy. One is people feeling, “My money is going to support the bums on welfare,” because there was a huge expansion in AFDC (”Aid to Families with Dependent Children”), which is the classic rap on welfare, although it’s never really all that much money. But it’s a big expansion in the visible support for nonwhite people. Is it “my tax dollars are going to pay for that,” or how much of it is just the empowerment of conservative politics, to put it mildly, because of the backlash?

Williamson: Yeah, I think both are happening at once. At the same time, you see welfare programs that had previously been available almost exclusively to white Americans suddenly become more available to Black Americans. You see, obviously, growing Black political power after the Voting Rights Act. So there’s a racial resentment and a backlash to that, and the origins of the “welfare queen” rhetoric. We’ve all heard the story. So that’s happening.

At the same time, you start to see the divide between the very wealthy and the rest of us. The compression of incomes and the economic spectrum that had typified the mid-20th century starts to break down, and you see the decline of union power and the rise of business power. All of these things are pushing in the same direction towards an increasingly radical anti-tax politics on the right.

Krugman: There’s a moment—an episode that really looms quite large in The Price of Democracy that I was really kind of unaware of—which is the 1978 change in taxes. This is pre-Reagan, although obviously some of the things that gave rise to Reaganism are very much in the air, but this is under Carter. Why don’t you tell us about what happened in ‘78? I thought that was a really remarkable story.

Williamson: Yeah. You have to make a choice about where you are going to say the turning point was. You can claim it was the Reagan era, or you can say all these other things. I settled on 1978 because three things happened that year that I think were really significant, and again showed what the conservative alliance against taxation would look like. A bunch of different forces were brought together.

First of all, you see a bill pass that is an enormous rollback on taxes for the wealthy, something that The New York Times at the time described as sort of incomprehensible in terms of our politics. Before that, it had been assumed that Americans liked raising taxes on the rich, and it would be very hard to do a tax cut that just helped the rich. But the new corporate interests found a way to do that, so you see this big rollback in taxes for corporations and the wealthy.

At the same time, there’s an attack on the IRS that is the first of what would become a recurring problem for the agency. That is to say, some issue in tax enforcement gets blown up in the conservative media and makes the IRS into a whipping boy for anti-tax interests. In this case, what had happened was the IRS was obligated by law to figure out how to remove the tax-exempt status for segregation academies—the whites-only schools that opened in the South as white families fled integrated schooling. Those schools were segregated; they discriminated on the basis of race and therefore did not qualify for a tax exemption. The court so determined. So now the IRS has to figure out what is a segregation academy and how to go about removing their tax exemption.

This was really hard to do because lots of schools opened in that period, and lots of schools were segregated. There was also a move to church schooling and evangelicalism in the same period, so the IRS was trying to sort through this. After several efforts to remove the tax exemption from the most obvious segregation academies, they issued a new set of rules. It became a trigger on the far right about how the IRS is coming for our tax exemptions, leading to congressional hearings and all sorts of fodder.

This is widely agreed to have been a key precursor to the development of the Moral Majority, because conservatives had been trying to get evangelicals on board with the conservative movement for ages, but evangelicals didn’t want to participate in politics. This issue brought them into politics in a new way. There’s an amazing quote suggesting that even abortion couldn’t get evangelicals into politics, but coming for their school’s tax exemption did. So that happens at the same time.

The third thing that happens in that same year is Proposition 13, the property tax cap in California. Property tax caps have a long and sordid history in America. They were invented in the Redeemer era that followed radical Reconstruction, as white supremacists came back to power. One of the ways they disenfranchised poor whites and Black Americans was by putting in place constitutional tax caps so that even if they managed to lose an election—if more poor Black or white people managed to vote—they still wouldn’t have the power to raise taxes on the rich. Now suddenly that same idea, which had been prevalent across the South a hundred years earlier, becomes a force in California. It’s very much part of the civil rights era backlash. They put in place a stringent property tax cap that applies largely to this day, which undermined public education funding in the state for decades to come.

Krugman: Yeah. I lived in California in the mid-’90s and was always struck by Prop 13. We had newly purchased a house there, and we were probably paying five times the taxes of some people a little ways down the road. It was a remarkable thing for people who stayed in their houses—basically older white people who already owned their houses got a tremendous tax advantage from that. It was really something.

So how did those 1978 tax cuts come about?

Williamson: There’s a really fascinating movement on the right that leads into this moment, and it’s a series of corporate breaks. What leads into it, fascinatingly, is that in the Kennedy era, they were also trying to cut taxes. The economy was booming, and people’s taxes went up automatically—not rates, but brackets.

Krugman: Right, bracket creep.

Williamson: Bracket creep. So they had more money than they needed. When Kennedy wanted to assemble business interests to cut taxes for businesses, he couldn’t find any groups to act as the grassroots mobilizers of this. Over the coming decades—and exactly at the time that union power was in decline—they started to actually develop these business interests.

There were moves to make what now sounds like completely standard rhetoric, but at the time was very strange: this new rhetoric about the possibility that these taxes were stifling innovation and entrepreneurship. That’s where they came in with these corporate tax breaks, to basically put in massively upward redistributive tax breaks. What they did was build grassroots organizations for business that today seem run-of-the-mill, but at the time were completely novel.

For example, lobbyists in Washington would bring in local business leaders from all the districts for “fly-ins” so representatives would hear from their own constituents on these business issues. That was a real development in terms of lobbying prowess, and it paid off tremendously.

Krugman: And so, in ‘78—and actually until Newt Gingrich comes along—you still had Democrats controlling the House of Representatives. This was not a Trump-era Congress, and it was a Democratic president. The public didn’t support tax breaks for the rich. I think public opinion would have been pretty populist in that sense. So what moved the votes? Why was Congress doing this? How did that influence work?

Williamson: At the end of the day, the fact is that mass public opinion isn’t what causes politics to happen. Politics is not a public opinion poll; it’s the mobilization of organized interests through a party system. So you shouldn’t expect things that most people believe to automatically become law. That’s just not how it’s done; you have to have organized interests. It’s a collective action problem, fundamentally.

That’s the underlying thing. But as the economy divides and as you have this concentration of wealth at the top, it’s self-reinforcing. As the rich get richer, they have more power, because money is power, and they start to invest very heavily in having greater political power. There was a lot of concern about the Nader era and all the regulatory things that were happening in the early ‘70s, which really helped to bring business power to bear—

Krugman: The Nader era meaning when business really started to say it needs to stand up and throw its weight around?

Williamson: Yeah, exactly. You saw what I would deem a great deal of progress on things like environmental protection and the regulation of consumer goods. These were some of the successes of that era, including clean air and clean water in the early 1970s. For a lot of more conservative-leaning business leaders, these were seen as encroachments on their capacity to be profitable, and so that helped convince them to devote themselves to politics. As they succeeded, of course, they became wealthier.

This is exactly the same thing that happens with the tax code. As the top rates are rolled back, you see more and more loopholes for corporations to avoid paying taxes. As the IRS becomes underfunded so that they aren’t in a place to actually enforce the tax code for wealthy people, all of those things are reinforcing, because a substantial portion of the inequality that we’ve seen over recent decades can be attributed to the decline of top rates. So it’s a really negative, reinforcing cycle.

Krugman: When I started, loosely speaking, doing the math, I was actually shocked—particularly if we’re talking about the very, very top—how much the change is actually driven by cuts in tax rates. As economists, we like to talk about technology, competition, and all of that, but actually taxes are a very large part of the story.

Williamson: It’s really the ‘70s where this starts to happen. It is all, in a sense, mechanical. The money that you didn’t have to pay in taxes, now you have, and it will accumulate more over time. It also has pre-distribution effects. When, for example, a CEO had $0.90 out of every additional dollar they were going to get paid going to the government—which was true in the mid-20th century—the board of directors didn’t have a great incentive to raise their pay unless they really had done something to deserve it.

There’s research on this, as you well know, but as tax rates go down, it becomes easier—cheaper, basically—to overpay executives. So it feeds in both ways: afterwards, you have these ballooning paychecks and they get to keep more of that money, but it also gives an incentive to balloon paychecks in the first place when those very high salaries are undertaxed.

Krugman: Yeah. This is a long-standing thing. The committees that decide on the CEO’s pay have always been basically appointed by the CEO. But why did that translate into 30 times the average worker’s salary in the ‘60s and 300 times now? Part of the answer, you’re saying, is that it wasn’t worth pissing off people that much—sorry to use the technical term—when the CEO didn’t really get to keep the money anyway. Now that he can, they do it.

Williamson: Exactly.

Krugman: You get this first wave of big, top-end tax cuts under Reagan, but fairly quickly, we get people agitating about the budget deficit. This is also when the budget deficit becomes significant for the first time since World War II, and there’s a feeling we need to cut back—the beginnings of austerity. Why isn’t there more of a backlash against these tax cuts? Why didn’t that happen?

Williamson: I think there are two things going on. First, there’s just the very effective lobbying techniques that business uses. They’re very powerful. There’s all kinds of political science research to suggest that legislators are more responsive to donors than to constituents, and more responsive to organized interests. They misperceive their own constituents again and again. It’s more true on the right, but it’s true on the Democratic side as well. Legislators misperceive their constituents as more conservative than they are. Some of that’s about who they talk to, and some of it’s about the media environment they live in.

There’s this persistent problem in the background. Thinking back to that capital gains cut in 1978, there’s just this new playbook that becomes part of our politics. It’s hard for us to even imagine now that this was ever new, but I think that it really does speak to the moment we live in.

Now, you’re asking about why it is that there hasn’t been a backlash. One important aspect of that is that for many, many years—and we are now testing the limits of this—these tax cuts were not “paid for.”

Krugman: Right, right.

Williamson: We paid for enormous wars with debt, and we paid for enormous tax cuts at the top with debt, so there was not a tradeoff that the American people would see right away. If you look at the George W. Bush era, this was a very conscious strategy. In principle, you could have taken the surpluses of that era and used them to shore up Social Security or do any of a number of other things. If you look at memos within the Bush administration, it was very clearly stated that in going to the voters to cut taxes in this very regressive way, they had to say there were no tradeoffs at all. Fiscally, barring the costs of debt and interest, there were no immediate consequences.

So there’s a real decline in the signals that would have informed Americans more about the choices that were being made in their names. Right now, the most recent Trump tax cut is an exception to that rule. Where the big tax cuts going back to Reagan were off the books, this time they’ve done quite a lot of retrenchment of major social safety net programs. They delayed that, but it is coming now as we speak, and I think it’s a question of whether that will be more evident to people.

One reason they were willing to take that step in the most recent Trump tax cuts—to also make it the most regressive budget legislation in history by simultaneously cutting taxes at the top and cutting benefits for poor people—is another indication that popularity is no longer a concern. Frankly, you want popularity to be a concern for politicians in a democracy. The budget legislation is a good indication that doing things that are popular in order to get re-elected by a majority of the voters is not the primary political strategy of the Republican Party anymore.

Krugman: Just for listeners—the tradeoffs we’re talking about now are that the “One Big Beautiful Bill” includes big tax cuts very much for people at the top, offset only partially by really savage cuts to means-tested, poverty-oriented programs like food stamps and Medicaid. I guess the question is: Is this a kind of cynical calculation that most Americans won’t care about that, or just a calculation that it doesn’t matter what Americans think?

Williamson: There are the immediate effects that will happen for the people who are affected, but this will have a huge impact on the economy. Medicaid supports health access for poor people and supports hospitals in rural areas. The ramifications are likely to be enormous and widely felt beyond the technical beneficiaries, for sure.

Krugman: Same with food stamps, of course. The extent to which the places that voted most strongly for our current government are exactly the places where you are going to lose a critical mass of purchasing power and a critical mass of patients who can afford to pay their bills at hospitals. People are not going to lose hospitals anywhere close to where they live in New York City, but they very much could in West Virginia.

Williamson: Yeah.

Krugman: To just come back a bit: We’ve been in this tax-cutting mode since the late 1970s, but there was one range of substantial tax increases during the ‘80s, which was the increase in FICA, the increase in payroll payments. This kind of gets at your thesis. You have an extended section in the book about how we came to pay for Social Security and then later Medicare with payroll taxes. That’s a story I think people should know, because it comes up now a lot as we talk about what we can do between Social Security funding and general healthcare reform. How did that happen? Because this is a regressive tax. It’s $170,000 or thereabouts, just the maximum. It’s a flat tax up to that level and nothing above.

Williamson: And it’s a tax on wages, not wealth, so it’s not taxing the income from wealth. The Social Security tax is a regressive tax that hits most people pretty hard. In fact, it’s the biggest federal tax for most households.

Krugman: So why did FDR make this choice?

Williamson: Well, he’s coming into office in the throes of the Great Depression, and they’re doing a whole bunch of emergency rescue measures to try and stabilize the economy. What he does not want is his pension plan to be seen as a temporary measure; he wants it to last forever. He wants this to be something that cannot be retrenched, and he wants to distinguish it from these other emergency measures.

There was a lot of debate within the administration about this. Plenty of people within the FDR administration said, “No, this is not the way to fund this. We need to fund it differently.” FDR was not always a policy wonk, frankly. But on this point he was extremely adamant, both because he wanted to distinguish Social Security from emergency anti-poverty measures and because he was always thinking about the politics of how you tell a story about policy. He knew that he could tell people they were making a contribution, here was what they were going to get someday, and here was how it was going to work. He knew that he could tell the American people to contribute to a fund like this, and he was right.

He famously said that the payroll tax contributions were not economics, but politics—to make sure that no politician can ever eliminate his Social Security program. To a substantial degree, that political logic was proven correct. The program not only survived, but grew after the Depression.

It’s funny—business interests at the time tried to mobilize against it. They were really trying to mobilize against his “attack the rich” rhetoric. In the following elections, they tried to go after him on Social Security because it was a $1 tax coming out of people’s paychecks. Business interests put propaganda on people’s pay stub envelopes saying, “If you re-elect Roosevelt, you are condemned to this tax increase, and who knows whether you’ll ever get benefits?” A union organizer famously said, “Why didn’t they put propaganda in your pay stubs last time? There were no pay stubs!” It was FDR who was getting us out of the Depression.

That was how FDR saw the fight. He was a political maneuverer, unparalleled perhaps in our history, and that was 100% the playbook they used for Medicare. They knew full well what to do to make a program that would survive.

Krugman: Now, it’s interesting. I don’t know if people realize this, but it’s only Medicare Part A, the hospital insurance part, that is payroll, and the rest comes out of general revenue. But in some ways, the aura of this separately funded program extends to the whole thing, even though a lot of it is not paid for by that bit on your pay stub.

Williamson: The downside, in terms of the price of democracy, is that people don’t necessarily think of these as government programs. People know about their Social Security taxes, and they don’t think it’s going into a bank account for themselves. Sometimes there’s worry about that, but people know that it’s going into a general fund and paying out today. They have that much of a sense about it, even if they don’t always have a full sense of the totals.

The flip side of putting this aura around these particular programs is: Does it implicitly denigrate other programs? I think there’s a case to be made for that. Over here are Social Security and Medicare—the contributor-funded, worthy programs—and over there are other welfare programs that are somehow seen as not as deserving or worthwhile. That’s a real risk of the approach.

Krugman: Yeah, okay. I’m always a little surprised looking at the record of the Obama years to see how much, particularly at high income levels, he did manage to raise taxes. CBO numbers say that the effective tax rate on the top 1% under Obama rose to pretty close to where it was pre-Reagan. But it was not going to be enough if we really want to have the kind of society that a reasonable, center-left person wants. So what are the prospects? Are we still living in this era of tax phobia? I think I’m dreading your answer here.

Williamson: Well, I think one thing that’s happened is that the mask really came off on this. For many decades, being anti-tax was a kind of polite fiction, a rhetoric you could use to attack the idea that a democratically elected government could do good for people. Rather than directly attacking democracy, conservatives attacked taxation. This is a replication of precisely the rhetoric that followed the Reconstruction period. The Redeemers, the white supremacists, came back to power through violence and intimidation, and organized themselves as taxpayers using rhetoric that looks very familiar to anyone who knows about Reagan’s “welfare queen”—that Reconstruction governments were full of corrupt, untrustworthy chiselers, and the poor, burdened, implicitly white taxpayers were rising up against that. It’s very similar to the rhetoric you see in the aftermath of the second Reconstruction, the civil rights movement in our own time.

To some degree, the dog-whistle aspect of anti-tax rhetoric has fallen by the wayside as the Republican Party has moved to an explicitly anti-democratic stance, like failing to accept election results. So the tax rhetoric is falling by the wayside, and the stakes are a lot clearer now.

The problem, to my mind, is what we have not seen. You’ve seen some real movement on the center-to-left side on all kinds of things—rhetorical progress—but what remains missing is a willingness on the part of center-to-left politicians at a national level to tell people that their government is worth paying for. At a state level they have to do this, but nationally, the unanswered disparagement of government—which has been a consistent part of our politics for my entire lifetime—paved the way for things like DOGE and the massive destruction we’ve seen in the last two years.

To some degree, I think that destruction has made the value of government more evident. It has brought things like the role of the CDC, or the fact that we had people watching our nuclear silos, to the forefront of our minds. But what I have not seen is politicians on the center-to-left talk seriously about the idea that the United States government is worth being paid for by all of us.

And you see that with the plans by Senator Booker or Van Hollen. Once you’re proposing very large tax cuts for middle-class and upper-middle-class people to the tune of hundreds of billions of dollars, we will not have those measures in place to do the rebuilding that is so absolutely essential.

Krugman: Even someone like Mayor Mamdani in New York City saying we’re going to tax the lavish pied-à-terres held by non-residents who have $100 million apartments—which is fine—shows he’s still kind of afraid to do a Willie Sutton and go where the money is.

Williamson: Yeah. To me, it’s hard because people want you to say it has to be one or the other. They want you to say either you want progressive rates at the very top—and I think there’s no way around that as an approach to reducing wealth inequality in this country.

I’ll tell you a story: Tom Paine, the guy who wrote Common Sense and famously said that the United States did not need a king, wrote The Rights of Man a few years later in defense of the French Revolution. In it, he includes a tax plan because he was worried about extreme wealth corrupting elections. It was a tax plan applied to income from wealth, and the top rate proposed by Thomas Paine in 1791 was 100%.

He imagined that there should be a limit to wealth—explicitly saying “any level that you would possibly need to support a family, any amount that you could conceivably earn through your own effort.” But he thought a level of consolidation like the wealth of the lords and earls in rural England endangered a republic. So there’s a very long tradition in American politics of very progressive tax plans, and that’s an important part of thinking about the future. At the same time, we need to think about revenue that will be available in perpetuity, and come back to that old idea that this is our government and that’s why we pay for it.

Krugman: Okay. So how long till we get a value-added tax in America?

Williamson: I’m right there with you, yeah. I think it’s about seven economists behind the banner.

Krugman: Okay. Well, this was great. The historical perspective is more and more important; you can’t understand where we are without looking back, and then looking forward with a little bit of trepidation, but maybe a bit of hope.

Thanks for speaking with me today.

The War in the Middle East Has Sent Big Oil’s Profits Soaring. Companies Are Pocketing the Money Rather Than Expanding Drilling.

How It’s Actually Going to Work

Objections to the Technical Premise

Objections to the EU Regulation

Google SynthID

Anthropic

OpenAI

Further Reading

Friday, July 25, 2025 Tour de France competitions: conditioning, bikes, and drugs?

Tuesday, July 8, 2025 Doping in the Tour de France: new dimensions

Comments

Related Stories

Comments

Related Stories

Downloads

August 2, 2026: Natural Color

August 2, 2026: Brightness Temperature

August 3, 2026

References & Resources

You may also be interested in:

Discover More from NASA Earth Science

Subscribe to Earth Observatory Newsletters

Earth Observatory Image of the Day

Earth Science Data

Comments

Comments

Related Stories

Comments

The Vanity Projects

Always, The Spin

Housing and Cities

Manufacturing

1.

2.

3.

4.

Comments

Related Stories

America Has Become Much More Immigrant

Immigrants Often Report Lower Cannabis Use

The Second Generation Changes the Picture

Immigrant Entrepreneurship May Be More Important Than Immigrant Consumption

California Shows Both the Opportunity and the Difficulty

New York Offers a More Recent Example

New Jersey Strengthens the Correlation

Florida Is the Counterexample That Keeps the Argument Honest

Immigration Can Expand the Market Without Increasing Use Directly

More Immigration Can Also Slow Cannabis Acceptance

Cannabis Law Creates Extra Risk for Immigrants

The Cannabis Economy Extends Far Beyond the Plant

Glass Pipes and Pipe Accessories Show How Cannabis Became Consumer Culture

Immigrant Entrepreneurs Fit Naturally Into the Secondary Market

The Strongest Argument Is Not “Immigrants Cause Cannabis Sales”

What This Means for American Society

A More Diverse Market Creates More Specialized Products

Final Thoughts: Immigration Does Not Create the Cannabis Boom, but It Helps Shape It

Comments

Comments

Related Stories

Comments

Related Stories

Max Power coming to Kennedy