"Critics call the surcharge a blatant attempt at redistribution of wealth..."
Um, yes? "Critics call John Travolta 'blatantly an actor, playing parts in movies.'"
Um, yes? "Critics call John Travolta 'blatantly an actor, playing parts in movies.'"
1. you agree with the principle of addressing wealth polarisation, but don't agree with tax as the mechanism? (in general or the proposed model specifically)
2. you don't agree that increasing wealth polarisation needs to be stopped/reversed?
3. something else?
Thanks.
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Edit: fixed the numbering, forgot I wasn't writing markdown!
1.) wealth/income inequality is inherently wrong, so redistribution is automatically good. private property is theft!
2.) whatever people get paid is theirs, fair and square. therefore redistribution is automatically bad. taxation is theft!
3.) some people are genuinely much more productive than others, and their pay may reflect that. at the same time, people can acquire more than their "fair share" by exploiting vulnerabilities in the system.
from the perspective of 3.), redistribution via tax looks like a dirty hack to mitigate the consequences of a deeper problem. it makes things a little better in the short term, but it doesn't address the root question: why are some people able to capture outsized compensation for their work? but hey, sometimes you have an urgent issue and the quick fix is all you have time to implement.
Islam requires a form of "charity tax" called Zakat. Its proceedings goes to the poor and needy, among others (e.g. freeing slaves, wayfarers, etc.). The percentage is different based on the commodity (e.g. livestock is taxed differently from cash), but the percentage is fixed (only 2.5% in the case of cash money annually).
However, and extremely importantly, it also prohibits exploitative and parasitic practices that cause very unfair advantages to some at the expense of others. Obvious things like lying and cheating (e.g. false advertising), but also very important issues of lending money with interest, selling what you don't own, selling debt for debt, etc. Most of which you'll find on Wall St. as normal behavior. Everything inside these boundaries is up for grabs. Remove these horrible practices, and things will get better almost by definition without having to start taxing people even more.
Scenarios 1 and 2 don't exist in the real world. They are just theoretical models.
Every law is a "dirty" hack, because the deeper problem is the nature of humans - which is to hoard privilege, wealth, power, and security - and the way that influences their societies.
Almost every non natural constraint civilization has imposed on humans has been to either support one group's hold on power and security (i.e primogeniture in feudal societies, taxes imposed on non-believers in the state religion) or the opposite: to redistribute power and security across the broader population (Magna Carta, The New Deal, Social Security / Medicare in the US).
There is a version of this that doesn't care about "right and wrong": Wealth inequality may happen for good and natural reasons, but too large quantities lead to a worse society for wveyone, and so redistribution is one way to reduce it.
The problem comes with policies of the form "We're going to tax [some wealthy group] and redistribute the money to [some other group]". There's a few sets of issues:
1. The money never gets to the downstream group. It gets eaten up by fees and processing, etc. Great for the middleman but not anyone else. If it does get to the downstream group, the total amount is gravely reduced.
2. You have to make a very strong case for taxing [some wealthy group]. Simply having wealth doesn't seem a good basis for taxation - "You're successful so we're going to charge you more taxes, maybe next time you won't be so successful" Obviously there are other arguments that can be made - the wealthy stole their money, or gained it illictly, etc - but those arguments tend to be individual cases and don't allow acting against an entire class of people unless you go into weird theoretical territory.
3. Solving "wealth disparity" isn't a meaningful goal. A thousand homeless folks all in the same campground have no wealth disparity - that doesn't mean you've improved their life. Simply funneling money doesn't solve problems, and making the end goal to shift around bits of paper is mistaking a process for a goal. If your goal is "We should provide a base level of healthcare to those who can't afford it" and can name an actual price for that, then that's a meaningful goal and you can tax appropriately if voters approve it.
My personal theory of "inequality" is that it isn't necessarily a bad thing. A distribution of income levels will always have a long right tail as you cannot make negative income but there is no theoretical limit to the maximum income. If all wages grow by the same relative amount, you would see increased inequality.
I think it is a problem if wages aren't growing for all portions of the distribution, but that is precisely because of the lack of growth for some and not because of the existence of growth for others. So, yes, I do think that growing income inequality may be a societal issue, but only if it is an effect of wage stagnation for middle and lower classes (which it is).
I do not believe that the rich getting richer is the cause of the stagnation, though. If anything, automation and globalization have been the main reasons for stagnation among middle and lower income levels. Automation and globalization may also be the cause of the continued growth in the very high wages. Even if they share the same underlying cause, one didn't cause the other.
I understand, but don't agree with, the argument that increased inequality causes social problems on its own. According to this theory, as I understand it, you can't have the differences among people be too great because it will cause too much power imbalance and resentment and eventually the masses will rise up and destroy the system from within. I don't agree, I think social problems come from the difference in reality compared to expectations of how one thought their future would go -- in other words, it is much worse for someone to see low wage growth in a stagnant economy where their standard of living is declining relative to their parents than it is to see moderate wage growth in a growing economy but there are some other people getting super, super rich. I don't think one's life relative to rich people is that important compared to one's life relative to personal expectations.
So, in that sense, I don't agree with redistribution schemes that intend on fixing a symptom of a problem (that rich people exist) rather than fixing a cause (wages are stagnant).
If the idea isn't to just reduce the inequality, but rather to supplement lower incomes -- there is absolutely no version of "taxing the mega rich" that we could do which would raise enough money to redistribute to the rest of workers such that it compensates them for the lack of wage growth at the lower end. It can't be done, there's not enough money. Eventually you have to tax the (productive) middle class.
From that perspective, I prefer policies that focus on wage growth for the lower and middle classes, even if that's a harder problem to solve.
You shouldn't think of the destruction of the system from within as the problem. Some might fear that, but afterall, its unlikely that the people without power would beat those that have it.
The problem is the power zero sum game in itself. Wealth and power are both ways to gather even more wealth and power. In a simple society without a government you could simply use the power to buy weapons and soldiers to coerce the wealth of others. In our society you can use power to shape the rules more favorably for your own group.
As the wealth ratio of one group converges to 100%, the other groups have gradually less influence, unless allowed by those in power because of ideology or their good hearts.
Either you see this as fine and natural, or your ideology prefers everyone to have some amount of freedom over their own lives.
In the later case you may look at ways to reduce the wealth and power inequality, by weeding out rules particularly favorable to the powerful, or by trying to spread wealth more evenly.
Who disproportionately benefitted financially from automation and globalization?
> From that perspective, I prefer policies that focus on wage growth for the lower and middle classes, even if that's a harder problem to solve.
You need to do both. No one was talking about this 20 years ago because most people were participating in the "good economy", even if some benefitted far more than others. Now people are being told the economy is good (by both major polities), but it doesn't match reality, which you noted is a major cause of angst.
Additionally, if your goal is to create more jobs and wage growth for low and middle income people, the best way to do that is to reduce economic concentration and create more opportunity for competition and small business. It will be less cost efficient, but the economy will be more resilient and the wealth would be more broadly distributed, even though some people could still achieve obscene wealth.
> I find it interesting that you frame income inequality as "wealth polarisation." Are you implying a bimodal distribution of some sort?
I wasn't intending to equate distribution and polarisation. By the latter, I meant the steady shift of wealth to a smaller population who have become progressively wealthier. While, at the other end, the majority have beome comparatively less wealthy compared to equivalent social cohorts over time.
Perhaps more succinctly, it's the _change_ in distribution, not the _presence_ of a distribution.
I'm no economist and I know there are a variety of opinions on distribution, but I understand there's reasonable agreement that globalisation has increased polarisation [0].
To be frank, as a supporter of capitalism - I generally support the notion of high taxes in europe because the populations who pay these taxes clearly see HUGE societal benefits as a result of half their income evaporating. There also seems to be more respect of the people's money from these gov'ts regarding how they spend taxpayer money is spent and with a clear aim to help the people NOT partisan goals, wars etc. I may be incorrect here (open to correction) but it seems like US politicians (federally at least) seem entitled to taxpayer dollars. Most forget that until WW2 the idea of federal witholding simply wasn't a thing and many middle class families were flushed with savings.
Unfortunately, both sides are at fault in the US. The only way this is going to change for the better is to cease the cycle of one political party only pandering to it's base instead of motivated and able americans.
15% of the budget goes to the military. That makes the U.S. the largest military spender in the world.
15% of the budget may seem expensive, but it's not fair to compare it to Western Europe. NATO is a big reason why western europe does not need to spend more on their own defense.
I believe that's a good thing - it's in the United States' best interest to avoid rearmament in Europe, and Europe has never been at (relative) peace for so long as it has been since the emergence of the post-WWII consensus -- but they do in fact have more money for more non-defense discretionary spending than we do as a result. The Euro area spends 1.4% of GDP on military spending while being protected by an umbrella of security provided by the U.S., which spends 3.7% of GDP on the military.
Again, I think this is good for the U.S., we benefit from the liberal world order that we enforce, but I think it has to be taken into context when the EU is described as a great example of how to spend tax money on wise social programs.
I take a bigger issue with programs like student loan debt forgiveness which would be a slap in the face to poor people like myself who worked their way through college in order to no longer be burdened by loans. Not to mention the fact that without a refresh of regulation on universities (specifically graduate degrees) loan forgiveness would just further embolden universities to increase tuition.
The issue with taxes in this country is that the budget is expected to always be met WITH excess. That's the disgusting part, the assumption that "well we can go over and shell out benefits to our beneficiaries (people who voted for us) and the american tax payer will foot the bill" is atrocious.
Both parties are guilty of this, however I also find it ironic that Americans (specifically privileged americans) seem to think that "taxing the rich" is a solution, when a) rich people already pay an overwhelming majority of taxes, b) the rich will always find ways to out-smart the government and avoid taxes they deem as unfit and c) even if you taxed earners above $400k 95% of their income it would only amount to maybe a trillion dollars - so not even close to bringing the national deficit down.
This is like saying that a cheap cure for cancer would be a slap in the face to people who drained their life savings battling cancer, and to the families of those who lost.
sooo ranked choice voting? :D
If I buy a car for $10,000, then I now have a car worth $10,000, and the seller has $10,000. Wealth was not redistributed, we’re both where we started.