It’s worse than that. Wealth inequality is inevitable in any system that allows private ownership of the means of production. Marx wrote about this in great detail.
Even if you tax capital gain more than working normally its easy to create inequality. If you make 1m a year with 90% tax you still end up with 100k a year. That’s still more than most people have. As long as we allow companys andsindividuals to exploit the workforce and extract value from it there will be inequality. If every worker you hired gives you just 1k after tax per year and you have 100 workers you still make more money than every single worker whose money you stole.
Wealth inequality is in the inevitable outcome of a market system. It’s mathematically baked in. A tax system like this just makes it faster.
Just read Henry George. Land value taxes, etc. He had it all figured out 100 years ago. The fact that we still try to determine elaborate methods for building equality is absurd. The correct answers, and methodology is a variable that is already a known, and backed by piles of empirical evidence.
He adamantly argued two things:
- Land value tax above all else.
- Labor must not be considered capital.
These 2 concepts are core to the economic foundation, of building a extremely dynamic society (huge middle class, open financial systems, urbanism etc.)
https://progressandpoverty.substack.com/p/the-curious-case-of-qingdao-chinas
Or for those very curious…
https://www.astralcodexten.com/p/does-georgism-work-is-land-really
The other issue is large stagnant piles of cash. Money not circulating through the system is useless.
is that useful in a world with speculation and day trading? genuine question.
It destroys incentive for speculative behavior on land. LVT increases density, reduces infrastructure costs, vastly increases distribution of housing. It increases the incentive to use the property and or improve property on the land. Property, houses, buildings etc are not taxed, the land below it is. It is extremely pro environmental, even pro business. It’s implementation is simple. It’s pro the 99 percent and harms owners of large parking lots in urban dense areas (the poorest use of land and essentially a speculative hold).
Norway used economic concepts from Henry George to utilize their vast carbon resources for the benefit of the many.
It takes the harmful effects of capitalism and turn it on its head. It is probably exactly what the USA craves. A decentralized bottom up movement in the USA pushing for these kinds of pro human, environmental economic policies could easily overwhelm the current political, tech bro corporatism elements in the USA.
Henry George absolutely solved the issue of poverty and inequality from a incentives/ structural economic standpoint. It is only the will of the 99 percent that is lacking. The 1 percent can be overthrown easily, in a quick and bold flick of the hand.
most speculation today isn’t on land though, it’s on value itself. like, trillion-dollar software companies use very little land compared to their value. elmos riches aren’t bound up in land, it’s all stocks.
i feel like i’m missing a step.
I see what you mean. But if I have my house on my land, and enough income to provide reasonably for me and my family, what do I care about their imaginary money games?
because as long as money is involved in your existence those games still decide whether your income is decent. the speculation economy decides the cost of wares and services, the worth of land and currency, and the political decisions that may change the way all those things develop in future.
also, presumably, because you don’t want to see others suffer.
This is basically the central thesis of world famous economist Thomas Piketty.
Inequality inevitably worsens if the rate on capital exceeds the rate on labour. That is, when society rewards simply owning capital and wealth more than working.
r > g
the rich are screwing the worker over
Read Marx
And after that, Kropotkin
I’ve not read much Kropotkin, I started his book on the French Rev but got pulled into other stuff. Need to get back to it.
I am a huge fan of Malatesta though. Why don’t more anarchists recommend him?
That is why we need robot overlords everyone is equal if we’re all slaves to our robot overlords!
I’ve heard it said that as long as investment returns average higher than wage increases, society will continue to get worse.
Make housing prices increases an investment and you give the rich a force multiplier.
There should be laws against predatory and fascist forms of Capitalism. CEOs going to jail should be a regular occurrence for a few years at least.
There should be set ratios between worker pay, CEO pay and profits. It’s the only way a just society can be returned.
We need a corporate death penalty. If corporations are people, we should be be able to charge them like people. Well-Fargo scammed over a hundred million dollars from their customers. I see no reason why they can’t be in a corporate jail, where damaged parties are paid out first, then the customers, then the employees, then the executives, and if there is anything left, let the investors have it.
Same for Equifax, they lost literally everyone’s personal data after collecting and selling it without their consent. If I did something like that, I would get multiple life sentences. The company and its assets should be liquidated, and the money generated should be used to setup a Identify Theft taskforce proactively checks for identity theft on affected individuals and pays out 100% if they are damaged by Equifax’s actions.
The problem is that wealth = power and influence in society and this has led to essentially all modern neoliberal ‘democracies’ having their governments captured and controlled by the wealthy elite. So the only way you would be able to implement something like this would be via a revolution replacing capitalism with some form of socialism that would make private wealth a thing of the past and provide a decent standard of living for all.
And if that in itself wasn’t hard enough, the other evil empires of the world would never allow this to happen anywhere. No gaining traction permitted. It would take the complete collapse or civilization world-wide, and even then we would just return to medieval fuedalism and Gun Diplomacy.
A few dozen more Luigis would also make it easier.
luigis are all nice but they only treat the symptom. the system can produce replacements faster than we can individually remove them.
i think we can go further by grouping up and also going for the root causes (eg capitalism).
Imho a hard cap on personal wealth would be sufficient.
I used to think this would be sufficient as well but as you’ve probably noticed it’s damned near impossible to get our “democratic” governments to even consider something like this since they have been so thoroughly captured by the wealthy elite. You don’t have to call it revolution or socialism if those are scary words or just don’t seem possible but somehow we have to overcome that reality and I don’t see how it can be done without dispossessing these elites of their power so we can dispossess them of their wealth.
I feel like perhaps a slightly easier first step would be to push for a cap that is higher than anybody’s wealth (say £100B) — so that the debate is initially only about the principle — and only then demand it be lowered. 1) salami slicing works, and 2) even just the fact of there being one (albeit unreachable) would imo do a lot psychologically.
And while we’re at it, another pet policy of mine is a tax that starts at 0 and approaches 100% as your income approaches infinity. Then you’d just play with the steepness of the curve. You’d still have the problem of pre-existing hoardrd wealth though.
Also the astronomical additions to the govt budget from all this would prob lead to equally astronomical embezzlement, rendering the whole limit ineffective. So another, prob more decentralized, mechanism of redistribution would need to be devised first.
fascist forms of Capitalism
There is no other form, the difference is only in what state of fascism it is.
There should be set ratios between worker pay, CEO pay and profits.
Not a bad idea. Except generalize it to max ratio between highest pay and lowest pay within a company.
Wouldn’t that just lead to splitting off of cheap companies, with pro-bono ceos that get paid more by the parent company through side channels? I don’t think there’s any fixing it with these kinds of laws, as they’ll just find loop holes to circumvent it.
maybe if companies were forced to be democratic so figurehead ceos could be ousted by the underpaid workers, but at that point it’s not capitalism, but socialism. and that’s how it usually goes imo, the workable solution to capitalism turns out to be not-capitalism
Yeah I always found the won’t invest to be bs. its like people don’t stop working because they pay taxes on it and actually its the more likely scenario with high taxes. Having the capital gains lower over time to encourage holding investments is sorta good but it need not be lower than income tax. Also a transaction tax would curtail daytrading nicely.
Almost as if by design… 🤔
A system crash is usually what happens. Exciting history book times.
The crash may take a thousand years or more tho
The reality is that a system can work just fine crushing orphans for fuel. That doesn’t make it a system worth having.
Return to Aztec where sacrifices had structure and were scholar priest approved (probably)
I somt think it would take a thousand years for modern society. As complexity increases so does the risk for cascading failure
The earned income tax is complete bullshit. Why would people be taxes for earning money through labor? You’ve already spent your time, and earning money through labor is already one of the least efficient ways of generating wealth.Besides you’re still going to have to pay sales tax
The central bank emits money, and gets it back with taxes. Without taxes we’d just have galloping inflation and probably wealth hoarding.
Today we also have wealth hoarding, which could be at least alleviated with taxes, and taxing work more than capital gains is ofc utter bullshit. IMO.
No, the central bank does not get money from taxes. That’s not how this works. That’s not how any of this works.
The central bank emits money that turns into inflation. On purpose. Because the only thing worse than galloping inflation is no inflation or deflation.
The way to not get galloping inflation is to not print crazy amounts of money.
Taxes are primarily there to fund the state (which has a much, much higher budget than what the central bank emits) and secondarily to discourage undesired behaviour.
Income tax is used because it’s super simple to collect, compared to e.g. a wealth tax or a capital gains tax which is more complex. Together with property tax and VAT (or other forms of sales tax) it’s the backbone of most tax systems because these taxes are simple to calculate, are simple to collect and are hard to evade. Also, they disproportionally affect lower and middle classes so the rich people in power like them as well.
Income tax is used because it’s super simple to collect, compared to e.g. a wealth tax or a capital gains tax which is more complex.
The real reason is that the people who are wealthy and make their money off of capital gains wanted to use the idea of income tax being easier to avoid being taxed themselves.
It’s a bit of both, surely, but it really is much more difficult to move employees, real estate and sales outside of the country than it is to move capital outside of the country.
Because it’s the greater way for the government to get money.
I’ll give my country example. 2023.
State tax income was 270.000 million euros.
Out of those 120.000 million were labor income tax.
Business tax was 35.000 million
Sales tax were 80.000 million.
The rest were other taxes.
Work is easy to tax, and more fair.
Sale tax is 21% to everyone. Labor tax depends on your income. The more your income the more you pay, so it’s proportional.
Removing all labor tax for sale tax would be highly unfair to people with low income.
I’m more on the opposite route. Sale tax should be lower and income tax higher.
Yeah, so you completely missed the point. A sales tax is based on consumption rates. People with more money will consume more and pay more in taxes which is appropriate because it’s proportional to not only their income but also they’re spending power. This brings us to our next point a persons spending power doesn’t have anything to do with their earned income, or The labor they provide, or the value they provide to the country overall at least in the United States. If you were born rich and you never worked a day in your life you would never pay an income tax you would pay a nominal 15% capital gains tax on the trust fund that your parents set up for you and then keeping sales taxes low and property taxes low basically just subsidizes you.
So increase capital gain tax. And run a net worth tax.
…what about capital gains tax?
Taxed from 19% to 21% depending on quantity.
The reality is that not enough people have a significant amount of capital gains. My country only have 30 people with over a billion euro. For contrast USA have 900. I think here only one million people have over one million euros in total net worth.
The truth is that it’s not rational to pretend that society get sustained only taxing capital gains, even if they were taxed 100%.
I’m all for augmenting capital tax, mostly because I don’t think there should be billionaires at all. But I do not think their disappear would make my taxes significantly lower. At the end of the day they are very few. If we want the current amount government expending most people, workers, will have to keep paying a ton of taxes, even if we were to expropiate and execute all the billionaires.
