Considering most billionaires (including Buffet, Gates, the Rockefeller's through their various foundations) argue for many of the policy prescriptions in this book as a way to fight their competition or even would be competition from ever gaining as much resources as them, this thread should be titled, "The book the .001% want you to read."
The book the 1% don't want you to read
- Thread starter Crackshot
- Start date
- Status
Samseau said:
Another is the Henry George solution and tax land and natural resources only. We live in a society where people give up their right to grow and hunt their own food supply in the name of Smith'sian specialization.
It is therefore only fair that common goods such as air, water, oil, iron etc, belongs to the 'people' as a whole, not a few oligarchs, as these are valuables which did not originate from the effort of anyone. The same with land. Tax natural resources and land ownership used for business more than today and don't tax income or corporations at all.
Since most of the wealthy make most of their money from owning land and resources, this will also mostly only target the wealthy.
Georgism is a solution that almost anyone, left or right, can probably find some agreement on.
Land/resource rent is the way to go.
Feisbook Control
Kingfisher
berserk said:
Definitely. That oil pumped itself out of the ground and that iron ore dug itself up. No human effort involved at all.
Likewise, that car that you're driving around, well that's made of iron, and there's oil in the fuel tank. Those things belong to the people, so of course you wouldn't mind if some people came and took them away.
Tail Gunner said:
Yes I know this, but I'm not proposing draconian laws I'm proposing a 5% net worth tax.
I would argue that losing 40%-60% of your take home pay is far, far, far, more draconian.
It's easy to implement a net worth tax. People must already declare their assets. Use those values to base the tax. Get a third-party or two to double-check what people put down as their assets.
And since corporations are counted as persons they can be taxed with a net-worth tax too.
Samseau said:
What about foreign corporations? You would basically force companies to move their head offices offshore and discourage any foreign investment in the US.
The wealthy use offshore structures to avoid their wealth being taxed in the US or any other major jurisdiction. Not a lot can be done about that, because they are the very people who have the ability to move their wealth and families offshore.
piketty's suggestions are only effective if the world collaborates on a global taxation system. it won't happen.
DaveR said:
No it wouldn't. Only in the short term.
The simple fact is that if you force people to work for each other and not multinationals, then their skills will increase over time.
The problem with most economics is that it's too focused on the short term. Short term thinking doesn't create strong communities.
Strong communities are more important than strong economies. Strong communities can easily rape pillage and take from richer people and that's why historically it wasn't the richest nations that survived, but those who were most loyal to each other.
But I digress. A 5% net worth tax wouldn't scare off business. Most businesses would bite the bullet in order to gain access to the market, provided the market is attractive enough. In additional, such a small tax is probably a lot less than what most other countries offer.
Samseau said:
So every company would be required to have 5% of their net worth in a liquid form to pay this tax. That's very different than keeping a % of the yearly profits. So you could lose a ton of money one year and still be hit with an enormous tax bill. Sucks to be employees of that company.
Would this tax be yearly or just when the politicians felt like it? This would be a very tempting tax to implement. Just blame the rich and take a % of their money when you want to. There is a tax like this currently in Colombia (3% a year). Where do you think most rich Colombians keep their money?
I expect a tax like this to be used in the US if the dollar loses reserve currency status and the US has to actually try to pay back some of it's debts. I don't think it would go very well.
I absolutely agree that income inequality is a real and important problem. The way the board of directors are run in public companies is appalling. Look to Europe for better corporate governance. In the US it's small group of people that are all on each others boards. The compensation committees are rubber stamps and outside consulting companies are a joke. The CxOs can pay themselves almost whatever the cash flow/borrowing power will allow. I would set limits on the amount of pay to executives of public companies as a multiple of average worker salary.
Samseau said:
Taxing corporations is more or less easy if you do not complicate the tax-code (which is currently highly complex exactly for that reason).
But a net wealth tax is for the 0,0001% incredibly difficult. The truly wealthy can and and do employ thousands of foundations, companies, banks & investment funds to hide their real wealth. Do you know that there are Royal company trusts stemming back over 200 years ago that give total anonymity to the owners?
Our economic system is so thoroughly fucked up that it would have to crash and be rebuilt or be practically dismantled honestly brick by brick. Nevermind such simple wealth calculations like with Gates or Buffett - those are peanuts. We cannot even find trillions (!!!!!) missing from US budget every few years, then add the missing trillions from the Fed, plenty of black-op budgets going into hundreds of billions. There is so much money simply missing that you could build cities on Mars for that cash. Meanwhile on earth most of humanity is going into "austerity mode". Such a scam!
Feisbook Control
Kingfisher
Even aside from money moving off shore, any tax always gets passed on to consumers. Companies would just put their prices up. So, saying that companies would just take the hit to do business doesn't make sense. Most small businesses operate on a profit margin of ~5%. In the short term, there'd be a price war and it would be about whoever had the deepest pockets to avoid bleeding to death. Tons of small businesses would go to the wall, and guess who that would leave? Big businesses. Wealth would be even more concentrated and they could then jack up their prices and gouge everyone even more.
As to people building strong communities, I agree, but although everyone always complains about jobs moving off shore, how many of them actually buy locally produced products. If people really cared about strong local communities, they'd have strong local communities. It's all talk. It's not just bankers, corporations or politicians who are corrupt. It's the entire culture.
Likewise, as for corporate governance, this is another issue that people love to complain about, but why? Here's the simple solution: don't own stock in companies that have corporate governance you don't like. Make sure the directors and officers have skin in the game, make sure they get rewarded only for positive performance (and not just in the short term). If they don't meet such standards, then don't invest with/in them.
As to people building strong communities, I agree, but although everyone always complains about jobs moving off shore, how many of them actually buy locally produced products. If people really cared about strong local communities, they'd have strong local communities. It's all talk. It's not just bankers, corporations or politicians who are corrupt. It's the entire culture.
Likewise, as for corporate governance, this is another issue that people love to complain about, but why? Here's the simple solution: don't own stock in companies that have corporate governance you don't like. Make sure the directors and officers have skin in the game, make sure they get rewarded only for positive performance (and not just in the short term). If they don't meet such standards, then don't invest with/in them.
You have to distinguish between true investment (i.e. funding a company) and purchasing assets (i.e. buying stocks on the secondary market).
strengthstudent
Robin
Ardbeg said:
This is true. The REAL growth comes from investments and savings -- it is funny that people think it comes from aggregate demand aka more and more spending. GDP =/= not necessarily an indication of prosperity, more like illusion of it.
As for this Piketty's book... this is just Marxism for the modern day. And yes, I say Marxism as a negative term because that's how I see it.
strengthstudent said:
Aggregate demand is feeding the investment loop. No one invests if the populace is getting poorer. There was a reason why Ford doubled the wages of his workers so that they could afford his cars.
Currently most of the billionaire money is going into more or less safe debt papers (profiting by countries getting in useless debt) or into the investment and futures markets. Futures markets are currently x-times bigger than the spot markets based in real commodities and papers. Basically it is shuffling money around and profiting from worse investors/traders & stupidity of governments which are big-time investors who get shafted too.
The plutocracy does not build new factories - they just transport them to cheaper places and automation takes care of the rest of the jobs.
I don't agree on the Nick Hanauer solution of just more taxes, but his assessment of the job market and real demand remains solid.
Also if you want to find out where we are going:
DCDC Global Strategic Trends Programme 2007-2036:
http://cuttingthroughthematrix.com/articles/strat_trends_23jan07.pdf
or
Jacques Attali book:
http://www.amazon.com/Brief-History-Future-Controversial-Twenty-First/dp/1611450136
No jobs, no wage growth, then no further investment by any sane businessman. You can only cannibalize the competition, but net there is no money to be made in any Western country except the developing countries who receive constant redeployment of Western production - China.
- Status