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States Should Tax Wealth to Respond to COVID-19

Originally published at http://www.commondreams.org/views/2020/09/24/states-should-tax-wealth-respond-covid-19

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Stop pleading poverty

And start paring wealth

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Taxing wealth is tricky, we only have the property tax. Wealth is not “realized income.” It sits in the stock market or elsewhere, and not until it is cashed out does it become realized income. Wage income is only about 54% of total national income (my source State of Working America, Income, Table 2.4) It might be best to levy a surtax on income over a certain level, like above $200,000, call it a temporary Covid-19 assistance tax. California had a referendum that passed that sent a certain “surtax” to fund mental health, about 15 years ago, and it’s still in force, I think. Wealth doubled between Jan. 2009 and Jan. 2020. It was $48 trillion, and then $118 trillion, now it’s $119 trillion (see Flow of Funds, page 2, Fed Reserve). Adjusting for inflation, it doubled in 11 years of low-growth performance. The gain is sort of incomprehensible, because obviously savings did not increase, GDP did not have big gains. The asset bubble fueled by Quantitative Easing is the best explanation, but it’s more complex than that. My blog, Economics Without Greed, Part Two, see August 2019 essay.

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George McGovern proposed $1000. a year to everyone-----today it should be $10,000----this is the easiest way to stop the wealth going to the top—and as Warren and Sanders said there needs to be a wealth tax------covid shows more than ever we need a med for all system----we should have community healthcare centers in every neighborhood.

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Let me suggest an amendment to the headline:
States and US should tax wealth.

The reasons are numerous, but above all, we have a climate crisis that must be solved, and inequality, as the major cause, must be drastically reduced. We need a guaranteed national income, expanded into the rest of the world as it can be, (starting with granting DC and all US territories statehood, with full representation in Congress etc.) we should have income and wealth caps with everything over the cap taxed at 100%. Over the next 10 years at most, we should use this to eliminate millionaires and billionaires, then keep lowering the cap until it meets the guaranteed income.

The money is needed to replace fossil fuels with efficiency, wiser lives, and clean safe renewable energy; for infrastructure repairs and updates; to transform chemical industrial agriculture into small-scale low-meat organic permaculture; and make industry ecological.

We can’t exist as a free society any more without universal health care, and without allowing everyone to rise as far as their talents and desire allow them, with affordable education and whatever help each person needs to make of him- or herself what they can.

The emotional illness of the decision-makers and the market religion that’s one of its main symptoms are preventing all of this, so truly democratic government action is needed, and it has to have the power and money to make it happen. The Willie Sutton Rule applies. We have to get the money from those who have stolen it all.