02-05-2020, 12:06 PM
(02-05-2020, 10:04 AM)Warren Dew Wrote:(02-04-2020, 07:23 AM)sbarrera Wrote: And in an era that is turning away from individualism and risk-taking, it will be hard to convince people that monopolists are a problem.
That's an interesting observation, and helps explain why crises can't be resolved nonviolently.
The political chaos of the middle-to-late 1780's in the new United States of America was solved with minimal violence. America solved the economic meltdown of 1929-1932 without appreciable violence, and American political life was very placid in the early 1940's.
Quote:Quote:Easier to resent the wealthy than to understand how they maintain their wealth. But then why not a wealth tax, as Warren proposes and Piketty recommends?
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.
The super-rich have more stake in the system than most of us do. When I heard the words "American interests overseas", I recognized that that meant corporate investments by American companies overseas. Neoliberal economics solved the problem of creating wealth. Its fault has been in in the meeting of basic needs and putting talent to use. Neoliberalism implied the use of Big Government to facilitate putting income into the hands of those who were already filthy-rich, supposedly because the welfare of the super-rich eventually trickles down to everyone else in the forms of wages or opportunity. That part did not happen. Neoliberal economics fostered monopoly, disparities of economic welfare at the least between regions, and in the end irresponsible behavior by elites. It has failed at all else.
Quote: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.
It is obviously as futile to tax the poor as it is to get blood donations from infants. Note well that monopoly has consequences even worse than high consumer costs. Monopolies create economic inequality; they deny opportunity; they create shortages and deny means of resolving those shortages; they give poor service to customers; they make exports needlessly expensive; they above all corrupt the political system.
Quote: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.
But estate taxes attack the entrenchment of power and wealth. Foundations often serve as a method to ensure a plush life for heirs who would rather have a steady income than a lump sum.
Quote: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.
It will happen as a means of meeting post-Crisis obligations.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.