4T is Speeding Along Now

[David Horn]

(02-05-2020, 10:04 AM)Warren Dew Wrote: In principle, some sort of wealth tax might be a good idea, and might be fairer than an income tax.  However, it can't by itself eliminate the problem of accumulation of wealth without also eliminating the benefits of free market capitalism, since the benefits flow from the desire to grow driving better service to the customer to increase market share.

Didn't you note the problem with monopoly monopsony in an earlier post somewhere? Excessive market power creates nothing and actually extracts far too much. Until that's resolved, worrying about a theoretical impact on competitiveness seems premature at best and naive at worst.

Warren Dew Wrote:It also has two other problems.  First, there's the problem that it doesn't really affect the publicly held companies that are the biggest monopolists.  Second, as with the income tax, the billionaires will figure out a way to lobby for benign sounding rules that in fact permit them to get away without paying any significant taxes.  The tax burden will instead fall on people who are affluent, but don't have market power, and aren't actually part of the problem.

That's a good point, but isn't it a reason to use more than one approach to solve problems. The real problems created by corporations has to do with a near total lack for regulation and oversight. Look at the Tech industry. It's anarchy.

Warren Dew Wrote:I think a better solution would be to modify estate taxes so billionaires couldn't escape them.  In particular, what needs to happen is that "charitable" contributions - which for billionaires mean transferring money to a nonprofit organization that they still control, and thus does nothing to alleviate market power - come out of posttax income, not pretax income.  You pay the estate tax first, then you can donate what's left if you want to.

I agree that wealth should not pass indiscriminately from generation to generation. Look at the Vanderbilts. Cornelius, the source of the family wealth, died in 1877, and left a fortune that still exists in some form to this day. Isn't it about time for that fortune to be taxed away to oblivion? Other than Gloria and her son Anderson Cooper, most of the family still leans on the remnants.

Warren Dew Wrote:Removing 50% of large estates and using it as a major source of funding for the government once per generation would likely be sufficient to prevent excessive accumulation of personal wealth.  You'd still need action to break up monopolies that are public companies, though.

Agreed.