4T is Speeding Along Now

[Warren Dew]

(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.

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.

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.

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.

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.