The government doesn't have to use your "dollar more effectively than you" if you have different goals. If the government wants to build a school and you don't want a school you don't get to choose not to pay taxes for the school. Other than just increasing the national debt (which I'm for) we tax people. A wealth tax would be a way to either increase revenue to increase spending OR increase revenue so that other forms of revenue can be cut.
Sigh. Let's kick the can down the road some more.
It is why at the beginning of the pandemic the Fed was aggressive.
It is why Powell said there was way more risk of doing too little than too much: https://www.usnews.com/news/economy/articles/2020-10-06/fed-...
If the government had boosted unemployment in 2008 along with more stimulus we would have gotten closer to full employment before early 2020.
I cannot think of a single bad consequence that happened in 2008 because the government spent too much. Is the gesture to the fact that all the banks didn't totally implode?
https://www.investopedia.com/ask/answers/012615/what-differe...
Whether a government engages in stimulus is orthogonal to whether it engages in aggressive monetarism. It is, in fact, possible to increase expenditures without tanking the global reserve currency. Indeed, the two are at odds so long as we rely on deficit spending, since our willingness to tank the dollar's value on a whim lessens others' desire to loan money to us denominated in dollars.
Furthermore, our demonstrated willingness to devalue our debts undermines our moral high ground when we criticize China for its exchange rate manipulation, and makes China less likely to set much store by our financial ties, freeing them to take more aggressive actions... as we've seen since 2008 by its actions in Hong Kong, the South China Sea, and Taiwanese airspace.
Is it a cultural reference from somewhere?
Taxing income is perverse and disincentivizes work. Taxing capital makes a lot more sense IMO.
Income you get by working.
Capital you get by inheriting, saving or by having capital, which earns you more.
To be clear I think capital is good and necessary but I see no reason why work should be taxed more.
Wealth is created by work, not capital.
No, it isn't.
OTOH, taxing labor income at higher rates than generic income (because payroll taxes) which in turn is taxed at higher rates than long-term capital gains (because preferential rates for the latter) and non-earned income through inheritances and gifts up through very large amounts (because of the large exemptions amounts in the inheritance and gift tax system) is, OTOH, perverse and disincentivizes offering employment (not work so much, because in either case people who need to work do if they can and people who can afford not to are less likely to; but by driving up the cost of employment at any given post-tax wage it reduces the quantity of work that it is profitable for employers to purchase in the market and thereby depresses employment.)
Fairer and simpler to tax income as income (and thus, make all of it qualifying for the kind of programs currently funded by payroll taxes, too), with perhaps much smaller inheritance and gift exemptions and the ability to freely recognize income for tax purposes in advance of realization and also to defer tax recognition of windfall income over a period of years to deal with irregular, norepeatable income like the long term gains for most of the working and middle class (but also certain patterns of other income like income from creative works that take an extended period of time but then payoff disproportionately shortly after completion.)
"Starve the beast" has failed. Time to leave it behind.
That's not a helpful argument because it is so general that we can bring it up against anything. I'm very certain you don't follow this principle in real life either.
> I'm very certain you don't follow
Don't say what I think for me. It's condescending, makes you look like you're more interested in cheap points, and suggests that you can't actually come up with an intellectual response.
I don't think it's a good thing; I think it's better to address the root of the problem rather than the symptom; and it's worth noting when a course of action isn't going to work. Otherwise you fall prey to the classic mockery: "we need to do something! This is something. We should do it."
All taxes are avoided to some extent but assets are actually easier to tax in many ways than income. If you want to have money and things it’s hard to hide that, whereas if you have capital you don’t even need income and can easily avoid taxes on it.
It reminds me of the new proposed tax in CA, where anyone over $N net worth has to pay M% of it per year. It'll be interesting to see if it'll help CA stay afloat, or if it contributes to the state's decline.
Isn't the whole idea behind making money to build a 'nest egg'? Seems like that counts as the small-scale version of exactly what you're describing.
Taxing wealth isn't some kind of rigid principle, where if you want to be able to tax Jeff Bezos you also have to tax Jane Millennial the same percent. We can, and should, and at least the vast majority of people talking about it want to, ignore regular people trying to save, and tax mega-wealth higher than moderate wealth.
Re the specific tax you mention the devil is in the details but it doesn’t sound great.
The problem is that it's not "you," it's the ultrawealthy, and their interests do not align with yours. While you're right that government accountability isn't perfect, at least there's an attempt at it.
But see, with the ultrawealthy, there's someone we can hold accountable. For instance, if Jeff Bezos isn't doing his part, we could just...
...hmm.
Oh, right! We could tax him more.
Wait, not that!
I was before thinking that a wealth tax did not make sense, but now that you raise these "bugs" in the system, then it makes sense to tax the wealthy a certain amount. 1% per year, maybe?
When the system allows everyone equal access to and equal opportunity to create profits, then it does not make sense any more to have the wealth tax.
For the most part, once you add in the other factors, the dirtier jobs pay you worse!
> If you want to imagine that all jobs can pay equally well
That's not what I said at all. I said that harder jobs paying more is NOT the problem.
I don't want all jobs to pay the same. I'm happy with some jobs paying ten times as much as other jobs. But there's a limit to overall inequality before problems start to happen.
Democracy, well most human social structures really, live on trust. Trust that we are all in it together and are better of participating in it.
When people start to perceive that others are taking advantage of them, unfairly, the social structure starts to crumble. Even if that advantage is then used to your benefit, the perception of it matters most.
In times past we’ve been “fixing” this by shaping the perception, manipulating people into believing that whatever way of government is used is good for them. Then silencing any doubters. In the 21 century its becoming harder to do that outright, because information is so readily available, so they have resorted to reducing its signal to noise ratio (fake news etc).
In any case, perception is key. If “the rich” (they) are treated better than “us”, and they are not supposed to, then you start having cracks in the fabric of society.
The appeal for something like wealth tax is not that it would make it better for everyone in the long run, but rather it would be perceived as more fair and lead to less discontent. Weather thats a good trade is up for debate though, you could always hire more cops to “enforce the peace”
Where is this assumption stated?
I always thought Wealth Tax was to prevent concentration of wealth.
“Where is this assumption stated?” makes nearly no sense when you’re talking about a worldwide political discourse.
On a related note, why does it seem as if some countries (all of Western Europe, for example) have managed to create more equitable societies using government policies?
When you realize the "you" isn't you as an individual--a middle, or upper-middle class person who might see another dollar in taxation--but the "you" is mega corporations and billionaires who only use their money in pursuit of more profit and building walled gardens to keep the grubby masses away, that might soften this hard-line libertarian view a bit. Corporations are soulless and amoral. And they have been caught time and time again sacrificing people's livelihoods, health and safety, mental and physical, to their bottom line. Corporations are also responsible for the vast majority of pollution on this planet and produce 100% of the trash littering the oceans. (you won't find a mom&pop's root beer can floating out there, anywhere).
In general I've found that my 20s libertarian view was highly biased to an underlying assumption that my experience is typical, and that the only thing that needed fixing was getting the government out of "my" life and wallet, and that everything would just magically follow from my own personal freedom. The reality is that every one of these typical people are very small fish buffeted and cajoled by advertising and the abusive power of rich people.
If the money is directly redistributed to those who need it, how is that the government deciding how it should be used?
Personal responsibility is well and good - we should all aspire to be more charitable - but it's become clear that it doesn't scale. Free-market capitalism is specifically designed to decouple the seeking of profit from the real-world consequences of that activity. This is what makes it so powerful, and also why it can be so destructive. It should be no surprise to us that a system designed to simplify and abstract people's relationship with society ends up eroding things like empathy and social consciousness.
If you ask me, human society can't effectively scale to this level at all. But here we are, and burying our heads in the sand when it comes to clear and present (and deepening) issues is foolishness.
When has this ever happened in the history of mankind? As soon as the government gets cash, when is it "redistributed?" Aside from 1) waiting on charity from the rich or 2) forcing people to yield more of their resources to the government that may or may not [history leans to not] do what you suggest, there is likely a plethora of ways, at the very least a third way. I'm not saying don't give people money, but I am saying it's naive to assume the government can do it. Demanding that we involve government is similar to children demanding parents come resolve their disputes and affairs. There must be a way forward without resorting to shouting "mom! dad!"
It happened across the world this year, in response to the pandemic. People in several countries were given enough money to make up for lost income. And even in the U.S. people were given a (comparatively paltry, but not insignificant) stimulus check.
Beyond that: universal basic income has been discussed and trialed quite a bit. As a permanent fixture of society I'm not yet sold on it, but as a temporary measure to stave off some of our acutely-deepening inequality, I think it would be a simple and direct (indeed, maybe the most literal) form of wealth redistribution.
That's not to say I don't think the government can spend some of the money on society better than our billionaires will (who, with few exceptions, simply don't spend their money on society at all). But I also don't think wealth redistribution has to assume that.
I personally know people that were saved by the $1,200 earlier this year. Waitstaff, retail workers, even some healthcare workers. This is a clear example of “we are part of the way there and need more funding”. The vaccines are being manufactured, we just need to give people more time.
> Without addressing the actual root causes of inequity, distributing... funds will amount to little more than an invitation to use force to take from the haves and deign to the have-nots
I’m curious what you think the causes of inequality are? Picketty makes a strong case that it’s caused by the fact that wealth grows more wealth at a faster rate than labor grows wealth. In which case a wealth tax or capital gains tax would cut right to the heart of inequality.
To use a naturalist's metaphor, wealth comes from having seeds and trees, with orchards bearing fruit. There are people with some trees and plenty of seeds to keep sowing, and there are some people with no seeds and simply waiting on the receipt of fruit. There is likely enough creative output thanks to the endeavors of prior generations to create enough orchards for us that handing out decent fruit rations would be great with little negative consequence, but wealth comes from planting and nurturing new seeds to grow new trees to create new fruit. In short, if we could empower people to start their own endeavors that could blossom fruitfully, that would be a better strike at the heart of inequality than simply shaking bear some trees at the more fecund and productive orchards. Picketty is not wrong, but that sounds more like oak trees and their ability to propagate thanks to squirrels running off with the nuts and burying them far and wide than some sort of ontological argument about society.
While a GPI (Guaranteed Progessive Income) will help, we need to focus on creating the causes for our own orchards, our own wealth. If someone else's presence of wealth prevents one's success, then maybe it is time for intervention, such as in the new era of logical and necessary Anti-Trust suits, but if the only obstacle is not having enough resources to start with (education, capital, knowhow, access to resources) it is difficult to see how shaking apples off another's tree will increase or improve those things directly. What's the ideal world? What's the ideal result? Perhaps we can work backwards from the Utopia we want to have, rather than incrementally towards a swamp of disincentives that counteract original aims.
[0] https://satisologie.substack.com/p/guaranteed-progressive-in...