Taking away the bulk of the rich’s money will fix income inequality, according to French economist Thomas Piketty:
Piketty’s terror at rising inequality is an important data point for the reader. It has perhaps influenced his judgment and his tendentious reading of his own evidence. It could also explain why the book has been greeted with such erotic intensity….
It’s no surprise that the idea of levying enormously high taxes on rich people’s money has had rising support in this era of proudly unearned self-esteem and entitlement, as well as decline in the power of religious prohibitions such as the commandment against covetousness.
More at the WSJ:
While America’s corporate executives are his special bête noire, Mr. Piketty is also deeply troubled by the tens of millions of working people—a group he disparagingly calls “petits rentiers”—whose income puts them nowhere near the “one percent” but who still have savings, retirement accounts and other assets. That this very large demographic group will get larger, grow wealthier and pass on assets via inheritance is “a fairly disturbing form of inequality.” He laments that it is difficult to “correct” because it involves a broad segment of the population, not a small elite that is easily demonized.
Oh, but it can be done. Where there’s a will, there’s a way. Piketty need only take lessons from Stalin re the kulaks, and from Pol Pot re—well, re just about everybody.
This is what Piketty proposes as a remedy for the terrible problem of income inequality [emphasis mine]:
Mr. Piketty urges an 80% tax rate on incomes starting at “$500,000 or $1 million.” This is not to raise money for education or to increase unemployment benefits. Quite the contrary, he does not expect such a tax to bring in much revenue, because its purpose is simply “to put an end to such incomes.” It will also be necessary to impose a 50%-60% tax rate on incomes as low as $200,000 to develop “the meager US social state.”
In case you’re wondering, Piketty’s book has been hailed almost universally on the left—and by “left” I mean almost everyone except the right.
They have turned to “income inequality” as the big bad issue because the actual plight of the poor in objective terms can’t be the point any more, since the poor are doing a lot better than they used to be in terms of their standard of living in most first world countries. In fact:
…[T]he last few centuries have seen us banish starvation and famine from a large part of the Earth. In the most successful countries, the average citizen now enjoys a material standard of living that would have made the greatest king of two hundred years ago turn green with envy…
To see how much more an American worker can buy today, compare the number of hours he would have had to work to obtain various items in 1895 versus 2000 (Table 1). Whereas a one-hundred-piece china set would have taken 44 hours of labor income in 1895, a twenty-first-century American would need to work 3.6 hours or less for it. The numbers are 28 versus 6 hours, respectively, for a gold locket; and 260 versus 7.2 hours for a one-speed bicycle (taken from De Long 2000, based on prices in the 1895 Montgomery Ward catalog). Comparing the prices charged in the Montgomery Ward catalog with prices today—both expressed as a multiple of the average hourly wage—provides an index of how much our productivity in making the goods consumed back in 1895 has multiplied…
As all this was going on, expectations and demands have risen, and so income inequality has been the new buzzword. Stamp it out, because it somehow “offends democracy.” The fact that the remedy Piketty and many others propose offends liberty, and the strong possibility that it could end up killing the goose that laid the golden egg, are both ignored and/or minimized in the rush to social and economic “justice”—that is, equality of outcome rather than opportunity.
I’ll let the inimitable Margaret Thatcher have the last word here (the following clip is from 1990):
[Neo-neocon is a writer with degrees in law and family therapy, who blogs at neo-neocon.]DONATE
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