Thursday, August 16, 2012
Private Wealth, Public Debt, and Taxes
Well, well. Over at VoxEU somebody just connected a couple of the dots:
“Increased levels of public debt are accompanied by mounting private wealth, which is increasingly concentrated on the wealthy elite.”
Could there be a connection? Could the public debt increasingly be held by a wealthy elite? Could that wealthy elite be charging their sovereigns rent for the use of the sovereigns own money, money only owed that elite in the first place because that elite have used their power over their governments to lower their own taxes? And the governments have had to borrow to maintain their services, and now they owe that elite too much to ever repay?
But note the key step: The elites used their power over governments to reduce their own taxes, and forced those governments to borrow from them instead. And now those governments owe too much, threatening the very stability of the system which supports their own wealth. Greed, greed, greed.
At Vox they propose a one-off tax of 10% on the assets of the top 8% of wealth. (The top 10%, in Germany, for instance, own 2/3 of the wealth.) They figure it will raise 9% GDP.
Good, but not good enough. The entire increase in the concentration of wealth since the 1970’s has been engineered by the elites. They should give it all back. The top 1% share of the pie more than doubled, for instance, so they should be taxed, on average, 50% of their assets.
It’s quite remarkable. They demand disproportionate compensation, because they are so important, and they run things. But when you ask, who’s responsible for the increased inequality, they deny responsibility, and point the finger somewhere else: Education, for instance. Globalization.
They manage the system, and the system is tottering. They take too much out of the system for a modern economy to support. But is it due to their mis-management and short-sighted greed? Or can we, they blame circumstances beyond their control? Well, if they do not run things, perhaps they are paid too much.
But we know very well who’s responsible for the financial predicament. Our elites, and their greed. So taxing their ill gotten gains is good for us. And good for them. Stave off collapse of the system, on which they, and the rest of us, depend. Will they? Or will our elites, who purport to run things, be shortsighted to the end? If the US elections are any indication…