Alexandria Ocasio-Cortez's 70 Percent Tax on the Rich Isn't About Revenue, It's About Decreasing Inequality
The 70% tax rate on the wealthy sounds good to me.
Let them have Whine with their cheese.
The federal government doesn’t need taxes to spend, and it doesn’t need to issue bonds in order to spend either. The natural resources are an issue, how much we can use the environment as a sink for wastes is an issue, but if we have the resources and the environmental space to do something, the federal government can do it, period. Not doing so is a choice. The question, ultimately, is after the government and banks create money, where does that money go? Who controls those decisions? What market and non-market impacts does that have, and how are those impacts and benefits distributed?
Tom and Joan: externalities of course need taxing. Carbon tax for instance and more respected conservative economists are recognizing this and calling for its introduction. Taxing incomes and wealth must work to reduce the ridiculous level of inequality. On income, the first $50k minimum should have a 0% tax rate.
I am not against carbon taxes, they are better than nothing as long as they are progressive in nature, I think it is irrational to think a tax we can apply on something captures the actual impact, and that market based means of addressing this make any logical sense beyond the short term. If we taxed environmental impacts in such a way that truly captured non-market impacts, you probably wouldn’t be able to buy a can of soda. The cost of everything would explode, and it would be immediately obvious that markets aren’t the best way of addressing this, at least not as they are constructed. We need economic planning, and that will require us giving power to states to do things capitalism currently doesn’t allow. Once aggregate consumption and pollution generation have been determined, only then does it make sense to have some type of market or quasi-market system distribute things throughout the economy. The idea that a decentralized economic system can operate within sustainable limits without planning and coordination, and by using taxes or something like a cap and trade program is highly problematic on a practical level. I think they are an okay short term measure, far more radical changes are needed though, and pretty quickly.
I also have problems with the way carbon taxes are being constructed in some places. I have heard plans in Canada, where a tax is put in place, the firms in question have enough monopolistic power to transfer those costs off on to consumers, and the state plans to step in to pay for that cost transfer. It is exactly what Karl William Kapp said with non-market impacts (so called, “externalities”), they are a cost shifting exercise, one that rests largely on power dynamics. The firms with monopoly power continue to have the capacity to raise costs to maintain profitability. The idea should be to not allow such a thing, to make it increasingly unprofitable to emit carbon, but that situation essentially subsidizes the profitability of polluters. Seems, if a carbon tax is implemented, that price controls are probably needed too. We already use price controls with private utilities, and public utilities are, well, public.
“The purpose of high tax rates on the rich is the reduction of vast fortunes that give a handful of people a level of power incompatible with democracy.”
Money is power, power corrupts and absolute power corrupts absolutely.
It’s good to see some honesty. It’s not about raising revenue, it’s about punishing people you disapprove of.
It’s not about making everyone equally rich by elevating incomes, it’s about making everyone equally poor.
The most likely carbon tax: A price is set and paid by consumer. Taxes collected given back to the public whether they purchase any fossil fuels or not. If fossil fuel consumption is not reduced enough then the tax is raised. As the cost goes up, alternative fuels become relatively cheaper.
Alexandria Ocasio-Cortez’s 70 Percent Tax on the Rich Isn’t About Revenue, It’s About Decreasing Inequality
Spot on AOC, spot on. With fiat currency the revenue argument will always fall prey to the arbitrariness of the alchemy performed by the central bankers. A progressive tax system is about progress toward a more just society. Keep it up AOC! We need your vision and your voice! (Probably some dancing lessons also.)
Again though, a carbon tax cannot capture the full impact of carbon emissions to begin with. If you think about the indirect impacts (ocean acidification, the dissolving of the coral reefs, the die off of phytoplankton, which supplies most of our oxygen, draughts, water shortages, collapse in agricultural output, coastal flooding, etc.), the full impact is almost impossible to calculate. You could make the case that it doesn’t have to, that all it has to do is sufficiently influence behavior, and that is fine, but if the tax were to influence behavior enough to actually save us, the price of carbon would explode, and since carbon is embodied in everything, everything we buy would explode in price. The changes that would set in motion would require massive, structural changes. We don’t need a tax to be put on something, which then has some macroeconomic impact, which we thereafter respond to. We could instead realize the problems of using markets beyond the short term and just use science to determine aggregate pollution and consumption levels, then employ national economic planning to figure out a democratic and equitable way of operating within those confines. The human economy is a subsystem of the ecosystem. It uses it for resources and as a sink for wastes and cannot get too big relative to the larger system. And, again, it shifts the costs that powerful private interests are creating entirely on to consumers. That isn’t a long term solution. That is a deepening of neoliberalism. I do not want to institutionalize cost-shifting. I instead would prefer using markets this way in the short term, and then get real about the limits to markets as things progress. It’s really hard, but there is no other way out.
I pretty much agree, but short term solutions are all we have politically at this time and way better than nothing.
I’m thinking we should instigate ritual human sacrifice and asset confiscation of the 0.1%. Maybe randomly select 5 - 10% of that group per year. Most will dispose of their assets either through spending or donation to reduce their risk. Others may take their chances. Either way a lot of money gets redistributed.
If you want less inequality, you have to tax “wealth”, not “income”. There is no direct wealth tax in the US at this time, there is some indirect wealth tax through inheritance and capital gains, but that isn’t enough.
Anybody seriously suggesting a “direct tax on wealth” in the US would be committing suicide. Not political suicide, but the old-fashioned one, only with a bullet on the back of the head, not in the mouth.
Best way is a land value tax ,the rich hate this one, as their obsessed with ownership of land.
Nunber two stick in a maximum wage ,they can still earn ridiculous amounts of money but limit it to millions ,end billionaires .
We already have land value taxes. Some places those taxes are quite high and some not so much. Maximum wage is a non-starter. Taxing very high wages with very high taxes is the way to go. Possibly up to 90%.
The Social Security component of FICA is a flat tax for wage levels under the Social Security Wage Base . Since no tax is owed on wages above the SS Wage Base limit, the total tax rate declines as wages increase beyond that limit. The Center on Budget and Policy Priorities states that three-quarters of taxpayers pay more in payroll taxes than they do in income taxes.
FICA tax also is not collected on unearned income.
That is the FICA Flat tax collects more at incomes below $110,00 than the "progressive " income tax collects below that income level.
Extending the FICA Flat Tax to all income solves many FICA funded tax issues forever.
Removing the wage cap and including unearned income to FICA would make this funding solvent in perpetuity.
In fact doing both would allow for an across the board increase of SS benefits.
Also by removing the cap and including unearned income, subjecting high income earners to this flat tax, the wealthy would then pay an additional tax - bringing the wealthy tax rates more in line with the tax rate of the working poor.
This change is a monumental fix of the existing tax code.
Additional Defense revenues can be collected by reducing entitlements for the Mega corporations that benefit most from both our Government and our economic system.
If the objective is to solve the budget problem the problem can be solved.
If the objective is to maintain privilege we have the status quo.
Property taxes are a modest form of wealth tax. The problem is that property tax is not progressive, you pay the same percentage no matter how big your house.
If you want to tax wealth, you must tax asset values directly - that has never been done in the US. It would never be allowed.
The purpose of government is to perpetuate its existence and the well-being of the governing class. It has nothign to do with the well-being of the governed, and anyone who thinks so is engaging is self-delusion.
Here’s a summary of the economic disaster that has hit the U.S.: There’s a report from the Economic Policy Institute, The New Gilded Age, and I quote from page 12, “The pattern in the distribution of income growth reversed itself from 1973 to 2007 as the income of the bottom 99 percent of families grew much more slowly (by just 15.4 percent) compared with the top 1 percent, whose average income grew by 216.4 percent. As a result, over half (58.7 percent) of all income growth in this period landed in the hands of the top 1 percent of families. (Data are shown in Appendix Table B8.)”
This report says that the top 1% in 1973 took in 9% of all income, but in 2015 it took in 23%. The economy more than doubled per capita, but the income of the lower half moved from $16,000 to $16,200, while the one percent tripled their income from $420,000 to $1.3 million per adult, 1980 to 2014, says the Washington Center for Equitable Growth, see Tale of Two Countries.
What happens to wealth that is not consumed? Professor William Lazonick in his essay Profits Without Prosperity shows that the S&P 500 corporations over a ten year period distributed 93% of profits to dividends and stock buybacks, not to wage increases or research or to plant expansion. Wealth was used to pump up asset prices, mostly financial asset prices. The Fed’s Flow of Funds report, page 2, shows that “net household worth” increased from $48 trillion in January, 2009, to $109 trillion in December, 2018 – adjusting for inflation it is less than doubling.
Fortunately now both Senators Sanders and Warren have proposed a surtax (Sanders) and a wealth tax (Warren). And I’m not done – the United Way charity has issued a report, ALICE, that 40% of Americans cannot pay their monthly expenses including food, shelter, utilities, medical care, transportation, phone service and child care – see United Way ALICE (Asset Limited, Income Constrained, Employed). So the system is clearly not serving the people adequately.
My blog: Economics Without Greed, http://benL8.blogspot.com