Piketty: three steps to halt inequality drift

[grasswire]

1. Instituting an annual progressive tax on total wealth. This levy would be assessed on all forms of wealth owndership, including property and stocks and bonds.

2. Re-establishing truly progressive income taxes with higher rates for the wealthiest. Among other things, this would help blunt the advantage of CEOs and top players in the financial markets whose annual income is hundreds to thousands of times greater than the average worker's.

3. Reinstating meaningful taxes on estates or inheritance. Piketty estimates that at least 60 percent of the wealth of the upper 10 percent derive from inheritance and not earned income.

..........
From an op-ed by Greg Cusack in The Oregonian. He has taught college American history and political science and served as a member of the Iowa House of Representatives. He retired as an administrator of the Iowa Public Employees Retirement System in 2004.
.............

Cusack also writes this:

[To halt the process of extreme wealth concentration] first we must disabuse ourselves of the contemporary gospel of "the market," which declares that, left free of any form of governmental interference, it will inevitably serve the interests of all. The market has always been influenced by government policy. The issue is: toward whose benefit? The greatest factor behind the dramatic reduction in wealth concentration in the 20th century was the two world wars and the Great Depression of the 1930s. These destroyed physical wealth and evaporated the value of stocks and bonds. However, the measures taken by Western governments during the same time to offset the social and political risks of widespread unemployment and poverty also redirected wealth to a broader strata of society. The risks they feared -- riots, revolution, fascism and communism -- were quite real. Governments since the 1980s, however, have again turned to policies supporting wealthier citizens, including reducing income tax rates and rendering inheritance/estate taxes virtually toothless.

http://www.oregonlive.com/opinion/index.ssf/2014/05/too_much_wealth_in_too_few_han.html

[Make7]

1. I don't foresee a wealth tax ever happening in this country.

But we already have progressive income taxes, so hopefully we can make them more progressive - like they have been in the past. I also am in favor of higher estate taxes - once again returning to higher rates that we have had in the past. There seems a greater chance for success of moving existing lines rather than trying to paint new ones.

Edit to add: I would like to see a financial transactions tax - even though that would be new and also unlikely to happen, still way more likely than a wealth tax.

[CTyankee]

2. the push must be stronger to make them more progressive.

We simply MUST have a much higher tax rate on ALL of the assets of the wealthy and all of the ways they make it.

[grasswire]

3. yes

as Piketty points out, those with great estates aren't earning the massive increases in wealth. The wealth has no use to anyone. Not to those who could never spend it in a lifetime; not to workers who suffer because others are hoarding wealth.

[Make7]

7. Getting rich people that were elected with other rich people's money to tax rich people more...

... isn't something that is likely to advance at a pace that will change things in the near term.

I'm definitely in favor of higher taxes - like taxing investment income at the same rate as wage income. I'm also not opposed to the idea of a wealth tax, but some taxes that are already on the books perform similar functions (e.g. estate and property taxes). It just seems like a push to increase existing taxes would be more likely to achieve results than introducing new taxes given the current political environment. Although if anyone has a brilliant plan to get more progressive tax policies enacted over the objections of the 0.1%, I would love to hear it.

[grasswire]

4. from the article

"On the eve of the first world war, the uppermost 10 percent of the populations of France, Britain, and the United States owned between 80 percent and 90 percent of total national wealth. However, by 1970 this had fallen to the 55-to-65 percent range. This relatively more egalitarian situation – which coincided with substantial increases in the welfare of the broad middle class since 1945 – was, unfortunately, not permanent.

Beginning in the 1980s, the upward trend of wealth concentration resumed. By 2010 the share of total wealth of the upper 10 percent had returned to 70 percent. If these economic and social trends continue, America will resemble the aristocratic structure of “old Europe” by the end of this century, with the richest stratum of the population controlling between 80 percent and 90 percent of total national wealth. Incredibly, of this the topmost 1 percent alone will account for 35-to-70 percent!"

[CTyankee]

5. Let us all here hope that this book, following the Occupy movement, will change the way

we think about taxation in this country.

I am hopeful but realistic. Iknow what the reformers will face...

[Make7]

12. I agree with his analysis of the problem and where inequality is headed in the future.

I also agree with his proposed solutions in that they would bend the curve in the opposite direction - I just think the political climate of America right now, and in the foreseeable future, will not see the passage of a wealth tax. I would be surprised (and delighted) to be mistaken, but I think a more convincing case can be made to roll back the tax rates (income, estate, etc.) to what they were in the not so distant past.

Unfortunately the roadblock to making improvements isn't that the solutions are unknown, it's that the politics normally preclude implementing things that haven't been pre-approved by the 0.1%.

[scarletwoman]

6. Yes, a wealth tax is probably a road too far at this time.

Still, I think it would worth advocating for, if for no other reason than to get the idea seeded in the collective conscious of the U.S. Who knows, it might eventually take root.

I am in total agreement about a financial transactions tax.

[Make7]

8. Oh, I endorse advancing things that won't ever pass to shift the negotiation to the left.

Unfortunately, the 0.1% doesn't appear to agree with me on most things - so that negotiating tactic doesn't seem to happen often at the levels where it would be effective.

The wealth tax is just such a hard sell with too many people out there like Joe the Plumber who don't want higher taxes because someday they'll be rich too! Freedom! You don't want to penalize hard work do you? You some kinda commie or somethin'?

I'm just saying advocating a wealth tax as part of a solution to combat inequality that will actually get implemented and have an appreciable effect is pretty unrealistic in America today.

[scarletwoman]

9. "Unfortunately, the 0.1% doesn't appear to agree with me on most things..."

Strange, that. I've noticed that, too.

[aikoaiko]

10. Is there a decent model for a wealth tax?

I've not heard of one.

[De Leonist]

11. While I think all that is a good start.

I think the best way for working people to protect themselves economically is Unionization. Governments often end up becoming run by the rich even if it is not always for the rich is the way that we see it here. The Union and only The Union has been proven to be the most immediate and effective weapon that working people have to fight The Class War.

[grasswire]

14. excellent point

...and welcome to DU

[Make7]

19. Agree. Raising the minimum wage would be step in the right direction as well. ( n/t )

[The Magistrate]

23. Hear Hear, Sir!

[winter is coming]

13. "Drift" implies aimlessness. The current state of affairs is not accidental.

His proposals deserve serious discussion, however.

[grasswire]

15. too true

the word "drift" was mine there, and it was imprecise.

[SheilaT]

16. At what point would you want the wealth tax to kick in?

I have what some here might consider wealth because for some twenty-five years I saved substantial sums of money, living well below my means, and now, after a divorce and moving to a new city I find myself able to retire at age 65 and live a modest life, owning a small home. What I have is allowing me to delay collecting social security for a few more years. My income is noticeably below the supposed median in this country, but I have stocks, bonds, mutual funds. Even a small tax on my assets would reduce them and reduce my already not quite bare-bones life.

I do hope that any envisioned wealth tax would kick in at some point above what I have.

[Curmudgeoness]

18. Well, it does say a progressive wealth tax.

That would mean, to me, that a certain amount of "wealth"---home, savings, etc.---would be exempt from this tax. I do not know how much you have or what the base would be, but the sad part is that everyone says "I do hope that any....tax would kick in at some point about what I have". And that is the rub.

BTW, congratulations on saving all your life and now having freedom to retire without concerns that you can't survive. I am close to the same point, also from living well below my means and saving from my first pay check.

[SheilaT]

20. Yeah, living below your means is the real key.

[TinkerTot55]

17. Also include...

4.) Eliminate all loopholes and hiding places for wealth, at home and abroad.

Much of tax evasion is being done by hiding assets, money in other countries.

[grasswire]

22. yeah, we never hear much about that!

Not even from Dems.

[rickyhall]

21. Need time machine

Go back to 1980 Stop Bush/Rumsfeld deal with Iran, defeat Raygun, if not "take him out". IMHO Ronald Wilson Reagan 666 really was the antichrist because of what he & his follows have done to destroy our democracy.