The economist who helped invent the proposed wealth tax

[tomorton]

There is a real problem when huge amounts of US consumer spending is being funneled through tax advantaged entities in order obtain near zero effective tax rates for people who measure profit in billions.

The tax code is 100% a tool for the mega rich to competitively cheat the US consumer. There are other things like regulatory capture, monopolist practices, and accounting fictions.

The abuses are absolutely ridiculous.

However, the voting citizens of the United States have started to wise up.

Up until now they have been placated with excuses, lip service, misdirection, outright obfuscation and various other forms of denial.

A wealth tax may be clumsy, and it may be unsophisticated. It may even be ineffective, but the people of the United States know the game is rigged. They just don't really understand who is responsible. They suspect that there is blame among all of the moneyed class.

But, believe me, the middle class is getting bent over every day of their lives and they are starting to wonder whether it is worth it to sit by and stay quiet when Warren is saying let's even the score. There is massive social unrest in this country. It is a tinderbox.

The US government has a massively inefficient record at tax enforcement. But likewise it has a terrible healthcare regime.

There's no need to hand the country over to Socialists because of some poorly framed policies that were inevitably poorly enforced. Once they have the US, its never coming back.

 

[Sig]

Its just a self-perpetuating cycle, between wealth inequality and these rotten governments. Wealth inequality is used to stir up populist movements and rotten governments come to power as a result, which do little for the people and use despotic anti-democratic means to sustain their power. Left and right use similar tactics here, but it happens to have been a more successful tactic for the Communists than for the right: that's maybe only because they're more organised.

Warren and Sanders are playing the same game. They say there's a problem and the only way to solve it is to let them get into power. I am not convinced its the problem they say it is, and if it is an issue, its not necessary to hand the USA over to Socialists etc. in order to solve it. Or anything. What extreme left or right government has got into power using wealth inequality as a campaigning tool and then made a serious impact on the statistics?

It has to be recognised that the only point of politics for politicians is to get power. Get power and avoid blame. None of this is aimed at making people's lives very different.

I think we agree, neither of us wants a socialist government or even Sanders or Warren. I'm saying that you're going to get it no matter if you want it or not if you don't do something about what is indisputably a growing wealth inequality in the country. The solution isn't telling people on the poor side of that divide that they're wrong and just need to come around to a different way of thinking about it, or to convince them that this isn't a real problem or that it's politics or a game....really nothing in the preaching to them side of the equation. None of that will change the inevitability of bad things happening when the inequality becomes too large and the solution gets taken out of our hands and put into the hands of the populists, who I agree destroy value in their attempt to "fix" things.
So why don't we try something new here. Why don't we attempt to fix things now, before the disparity gets to a dangerous level, before the decision gets taken out of our hands and beyond our ability to influence it? To do that we have to stop with the fantasy that this won't eventually happen, it almost inevitably will if we remain on the current trajectory. Heck, we're pretty close to a Sanders or Warren Presidency right now...that fact points to a system that isn't very robust! As I said I think you were initially on to something when thinking about economic efficiency, why not flush that out a bit? Why not think about setting up incentives and disincentives that lead to decreased wealth disparity over time? I'm not sure what the answer is, but I'm pretty sure it's decidedly not telling the increasingly poor that they just need to be happy with what they've got and keep a system in place that results in the increasingly rich taking a larger and larger portion of the nation's GDP.