A recent New York Times story on Senator Warren’s proposed tax on the very wealthy notes that polls show it to be a popular idea among those it is intended to benefit. But some economists worry that a 2% tax on family wealth over $50 million(or 3% over $100 million) will remove incentives for growth. If the tax had been in place for past decades, we’re told, Bill Gates might have only half his 100- plus billions. How would he manage? And why would he have bothered developing Microsoft for such a piddling sum?
It is widely agreed (as Thomas Piketty laid out in his influential book “Capital in the Twenty-first Century”) that inequality is dangerous for democracy. In fact, oligarchy, rule by rich people, is not democracy, and that’s where spiralling inequality is taking us—if we’re not already there.
The wealth gap is approaching the all-time high of the 1920s, after shrinking in the post- Depression decades to a more acceptable ratio.
Trump’s supposed tax breaks for the 99% have done nothing to address inequality. On the contrary: the gap has increased since 2016.
Neither has the Bill and Melinda Gates Foundation gotten the job done. Gates, Buffett and other billionaires with progressive politics seem to have genuine interest in helping people.and are a welcome counterbalance to the dark money of the Kochs. Won’t Warren’s tax be insulting to these kind-hearted billionaires? Will they get all sulky and close up their charities out of spite? Actually, it would be disappointing (and surprising) if they didn’t get behind Warren’s progressive tax proposal as being far more (and far more practically) in the spirit of what they want than their own noblesse oblige efforts.
The argument against the Warren tax that it will have a dampening effect on creativity and productivity assumes that the only reason people have to get up in the morning is to become rich, even though only a miniscule percent of us in fact become capitalists. It is my sense, that the main thing that floats the boats of creative people is designing and building the better mousetrap not getting rich from it. (Designing and building mousetraps would seem to be a very roundabout way of becoming filthy rich.).
Warren’s wealth tax would not have a done a thing to dampen the creative lives of the likes of Edison (or Elon Musk).
The Times’ article argues against the Warren tax that not only will such a tax “create economic stagnation, depressed business confidence” but that “ billionaires, with their legions of lawyers and accountants, have proven to be experts at gaming the system to avoid even the most onerous taxes.” This is an argument against the Warren plan? That it’s a bad plan because the very wealthy will oppose it? Of course most of the wealthy would fight for every last billion, however much it threatens democracy. And if they win, well that’s what an oligarchy is: rule by a small majority of wealthy people and the lawyer and accountants they can afford to attack with.
Isn’t Warren’s proposal rank class struggle? You bet. Just as voting and rooting for Trump is class struggle against the elites.. But Trump has never intended to narrow the wealth gap. Warren’s plan, in the tradition of mid- 20th century progressive redistribution of wealth, would work.
It’s the vast majority vs. the tiny minority whose money has a dangerously large influence. It is democracy vs. oligarchy.
If not Warren’s (or Bernie’s) tax on the over-rich, how else to address inequality and combat oligarchy? Where are those other proposals?
I’ve been told by friends who purport to have their finger on pulse of real America that there are people who want to protect the very wealthy class from Warren’s tax because, who knows? There’s always the chance, this being America and all, that they themselves will end up a multi-billionaire and join that class.
Really? Can we have a show of hands on that?