facebook Twitter Like Gmail By Jake Johnson July 26, 2023   A group of progressive U.S. lawmakers on Wednesday proposed a wealth tax that would automatically rise during periods of surging inequality and fall once inequality moderates. The tax is at the heart of new legislation called the Oppose Limitless Inequality Growth and Reverse Community Harms (OLIGARCH) […]
  • DavidGarcia@feddit.nlEnglish
    3·
    1 year ago

    I really wonder how you could effectively reverse all the wealth inequality since 1971. Wealth tax is nice and all, but what do you do with all that money so it actually resistributes wealth back into bottom 80% without causing additional problems.

    Like if you just hand out money there is a legitimate argument that you significantly increase inflation, possibly wiping out any increases in wealth. But it’s also very possible that this inflation will only be transitory until the market has returned to equilibrium.

    Another issue is poverty traps etc… You need to be extremely careful how you implement welfare to not get worse outcomes. Designing the right incentive structures is crucial to actually do good with welfare.

    I think it would make most sense to just return to stable money that doesn’t inflate away the bottom 80%'s income and wealth, and if you redistribute wealth, do it with significant tax cuts on the bottom 80%.

    Also cool down this debt market that is spiraling real estate prices etc out of control. But that kind of goes hand in hand with a stable money. Alongside regulation to reign in real estate speculation. Like ending this silly scheme where you get a mortgage based on the rent you claim you can get, that then makes it impossible to decrease rents. Penalize vacancy. Good quality public housing to rival the markets like in Vienna. Cap rent increases to inflation (that hopefully doesn’t exist anymore anyway at this point).

    And in general, since stock markets consistently grow around 8% a year, there is an argument to be made that you should have a 8% wealth tax. You literally don’t have to contribute anything to society by investing in stock market funds except for already having money. If the rich can get more than 8% a year, we’ll assume they net benefited to society, so they are allowed to keep anything above 8%. If they earn less than 8% their wealth will be slowly eroded away, we’ll just assume they didn’t deserve that money in the first place because they’re not contributing to society.

    Of course you can also set the tax at anything below 8%, but I don’t think it’s a good idea to go any higher than that.

    Basically you make everyone profit from the growth of the economy, not just the privileged few.

    Average people shouldn’t have to waste any brain bandwidth on investment just to secure their wealth from crony created financial repression.

    Again, not sure what to do with all that money so you actually create a net positive for society. Perhaps a UBI, if it works in practice. Perhaps you create a UBI and private account that can only be used for certain things like housing, health education, etc. sort of how Singapore does it, which seems to work pretty well. You could effectively create a right for housing like that while preserving free market dynamics. I like wefare like that, that preserves freedom of choice and market competition, as well as making average people directly profit from society’s economic growth. It seems like the best of both worlds.

    • Yllych [any]@hexbear.netEnglish
      5·
      1 year ago

      Your heart is in the right place, but each of your proposals is contingent on the bourgeoisie agreeing to structural and political changes that only harm their profits. In any case, reform made to capitalism has historically only been a temporary setback until capital finds itself a new way to gain the upper hand.

      Without a mass working class movement and a resulting break from the logic of capital, you cannot force the dictatorship of the bourgeoisie to address the accumulative and cancerous economic mode that has placed them into positions of power.

      If we want to fundamentally and permanently address things like poverty, homelessness, hunger etc we must trace these problems back to their sources within capitalism and the exploitation of wage labour. Without that, we can only fiddle with the levers and knobs of a monstrous engine.