A commentator called Derek Henry suggested I give this site a plug:
It's worth reading. My favourite quote comes from Stephanie Kelton:
You don't tax the rich because you need their money in order to feed a hungry kid or fix a crumbling bridge. You tax the rich because they are too damn rich and extreme concentrations of wealth especially, but also income, are bad for the functioning of the economy, are bad for democracy. That's the rationale for taxing the rich. Not because we can't do other things unless we get money from them to pay for it.
That's about as good an answer as to why we need a wealth tax as you will get. In a nutshell, it's good for society, the economy and democracy.
And modern monetary theory let's you realise they're amply good enough reasons in themselves.
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Short, sweet and to the point.
Unlike myself on too many occasions…………………..
Seems much more about envy to me, with much less to support it in terms of democracy or economics.
So you’re indifferent to democracy, economic balance and social justice?
Not at all, it’s just you’ve provided nothing to support your claims about democracy, economic balance and social justice?
Applying excessive taxes to one subset (simply because you can) seems to be the opposite of democracy, fairness, and justice.
By definition, apply the same tax rates (as apply to everyone else) does already bring in massive amounts of tax, as they are applied to higher levels of income / wealth!
Oh good heaven’s, there is a vast literature in support of this out there
Start with those hotbed of international socialism called the OECD and IMF
But let me assure you, your ignorance does not make an argument
If the rich did not use their wealth to make themselves richer at our expense or buy influence when lobbying Government I (and many others) would not mind their riches at all. Honestly.
But they do James. They do use their money to influence society in this way and enable the daylight robbery of those of us on more moderate means.
And to fund what? Unproductive lifestyles like buying islands where the locals have no health care or services to help in emergencies. Propping up niche businesses like the luxury yacht business or the odd Lear Jet dealership? Funding so called think tanks or so-called institutes whose members are purveying nothing but dogmatic unproven theories holding up mirrors so that the rich benefactors can see themselves in all their reflected glory?
Oh do come on.
There is nothing envious about this. All the thinking here does is address the imbalance and unfairness of this issue.
Money was never meant to be accumulated like this in this way. Money was created to be used and put to work for everyone in wider society – it is how good capitalism works and could still work if certain people stopped accumulating money for accumulations sake and taking more of their share.
This is why we have moved from social affluence (where the economy benefits everyone) to elitist affluence (where the methods and mechanisms of wealth accrual for the wealthy take centre stage).
It does not work. We don’t like it because of that. Not because we are jealous.
Really……………………?
It’s a myth that ordinary people live in constant envy of the super rich. This is just their cheerleaders projecting their values on to the rest of us. In reality, the envy is between a small number of people competing to display the most conspicuous consumption, whether it is the largest yacht, private jet or whatever. These are people who can’t find satisfaction in relationships or community, and for whom nothing is “enough”. Their environmental impact is disproportionately huge and the material wealth they accumulate depends on the destruction of the healthy ecosystems and natural resources that are the real wealth of this planet. For this reason alone taxation should be used to restrain extreme wealth.
You are right re the politics of envy
This is the wealthy’s reflection of their own thinking
They are those analysed by jealousy
So that’s where they went! Thanks. That site’s on my regular route now.
It seems your “How do we pay for it? We work for it.” fits into that set of speeches — I haven’t worked out exactly how. We get the things we need by making them; we work to make them; money is not a thing, just a score in the system we use to chose what to work on … something like that.
Excellent stuff Richard. Thanks for posting it.
James, it isn’t about envy it is about distribution of power. That’s what democracy is all about. Have a read of this article for a broader explanation.
https://www.co-intelligence.org/CIPol_democSocPwrAnal.html
I think this bit is particularly relevant.
“There is no such thing as absolute freedom. Freedom is a function of social power. There is only freedom for particular individuals and groups to do certain things.
Where there are fundamentally opposing interests, an increase in the power (and freedom) of one individual or group necessarily means a relative decrease in the power (and freedom) of the others.
Unemployment increases the freedom of employers to get their pick of job applicants, to pay low wages, and to avoid protests from workers. For the same reasons, unemployment decreases the freedom of workers. Likewise in a drought in India, thousands of peasants may starve while grain merchants get rich.
The total amount of freedom existing in a society as a whole depends on the overall distribution of social power. A free society is not achieved by trying to maximize the freedom of people as individuals, but by pursuing a balance or equality of social power among all individuals.”
Society is a compromise, a social
Contract where everyone benefits. If it isn’t then there will be strife. Why should I let you have more of society’s wealth than I get? What benefit do you bring to to the whole to justify your privilege? If nothing, why should I agree to it? Why should I accept your rules? Why should I not gather my fellow disenfranchised peasants and march on your big house with our pitchforks?
What should be included as “wealth” for the purposes of a wealth tax.
Just wondering??
Wealth
You want exclusions?
What?
Why?
Exclusions? No, although I am not convinced that it is completely moral to impose tax on the money compensation for human labour. Rent, yes. wage or salary – questionable.
What? As above.
Why? Because I struggle to have an adequate definition of “wealth” in my mind. To me it includes much more than money eg. land, buildings, goods produced by human effort, water and more.
So how might you fund the NHS, education and all those other things we need without inflation arising?
Just thought I’d say
@ James Brooks
“Applying excessive taxes to one subset (simply because you can) seems to be the opposite of democracy, fairness, and justice.”
The neoliberal ideology entails the notion that people are moral. It extrapolates from this position to propose that therefore there is no need for law to guide distributive justice. As usual the neoliberal position is flawed, it is true, most people hold to a set of morals but not all. The minority exploits any and all weaknesses of statutory imposition. Thus we see tax avoidance/evasion, extreme lobbying of politicians, purchase of influence, one sided access to judicial remedy.
I would offer this alternative:
“Applying excessive economic impositions to one subset (simply because you can) seems to be the opposite of democracy, fairness, and justice.”
Under this definition the growth of zero hours contracts, faux employment contracts, the imposition of nearly a decade of wage caps need some explanation. As do food banks, homelessness, Grenfell tower, the relentless rise of austerity ‘diseases’ of alcoholism, suicide and rising rates of mental health illness. The explanation is required to answer the fundamental questions of who benefits and why? The perception of the system as fair is not one that is easily argued at the moment.
As for the accusation that Richard has offered no evidence. The responsibility for ensuring that one’s opinions are valid lays with the individual. As does the need to keep the empirical base for those opinions under constant review.
I would recommend
A theory of Justice – John Rawls
Morals & Markets – Armin Falk & Nora Szech
The Price of Inequality – Joseph Stiglitz
False Dawn – John Gray
These demonstrate the fraud perpetrated by neoliberals.
And of course Richard’s work here provides ample links to research across the globe.
Thanks
An elderly biologist writing. She is not quite making the right point. It isn’t a question of ethics or equity. It is a question of ecology. The ecology of money. Richard has explained how the Government creates money out of thin air, and how, thanks to the fiscal multiplier, when it spends thin air money, it can get back more than it spends. The problem with the rich is that too much of their money leaks out of the system, creates bubbles, or disappears back into thin air. Leaving money with the rich has a lousy fiscal multiplier. The default position should be that all government spending needs to pay for itself. The difficult questions are how and why does this go wrong? how to spend more effectively? and how to use tax to get the fiscal multiplier back on track?
Good questions
Michael
Then you’ll appreciate this………………
The late Irish economist Richard Douthwaite wrote a booklet called ‘The Ecology of Money’ (Schumacher Briefing No.4, 2008 Ed, Green Books). This was the first time I was introduced to money being treated as it is in this blog – going back to the fundamentals of what money is about. I read this book (which for me at the time was revelatory and so heterodox) and then searched a long time to find somewhere that actually found the ideas in it worthy of more time (and eventually thank goodness landed here and a few others).
My conclusion after grappling with this book was that we take money for granted – literally. And there is a strong moral fibre in Douthwaite’s writing which you may appreciate. I know I still do.
Richard Douthwaite was a great guy, and write several well worth reading books that will long be in my shelf
I think it was also Stephanie Kelton who, when challenged that rich people are already paying more than their fair share (of tax), said: they’re not paying more than their fair share; they’re taking more than their fair share in the first place
Mr Brooks,
Taxation is the single most effective, compulsory way sovereign power exercises its authority, day in day out, over the population; and the prime way sovereign power ensures the population accepts its sovereign authority. Taxation is how Parliament (the sovereign power), rose from relative obscurity to become the sovereign power in Britain. The Crown in Parliament is essentially the power to tax.
What the sovereign power must not allow (in its vital interest), is individuals to accumulate sufficient untaxed resources to enable them to subvert the sovereign power of its authority to apply tax to special privileged groups (privileged by avoiding tax or being largely untaxed); privileged individuals whose power and resources have been accrued at least in part, through advantageous tax privileges. The test for this, in the end is the quantum, not equity or fairness (this is about where sovereign power rests).