As a radical loon, I will need to have something whacky to propose when the world economy collapses sometime in the not too distant future. The only thing I have heard that gets me at all excited is the idea that we should run around calling for a 100 per cent wealth tax on the rich.
The purpose of this would be to free up some funds for useful investment that would give people jobs now and put the economy on a better footing for the future. The refusal of the rich to invest would be clearly seen as part of the problem. Also with the rich making the ultimate sacrifice, so to speak, it would be appropriate to accept short to medium term wage cuts to increase the demand for labor.
Because the rich will try to bite back it will be necessary to take all their cash and income earning assets to reduce their ability to cause trouble. Beyond a certain modest level, the only permissible income earning wealth would have to be locked up in retirement funds. At the same time, those senior executives who are uncooperative despite financial inducements would need to be replaced.
Private companies will continue as before. The “only” difference is that shares and debt previously owned by the local rich are now owned by the government. It would be unwise to touch foreign owned capital. It would be best left to governments in other countries to lay claim to it.
Of course none of this would be happening without a seismic shift in thinking among the population at large. In particular, there would have to be a lot of people who are starting to come to grips with the idea that we need a new society and this wealth tax was just the start. At the same time, the active supporters of the status quo will have to be considerably weaker, being divided, paralysed and discredited. Losing their funding from the rich would not help. Then there is the large middle ground that would have to be prepared to give the idea a go given the total economic paralysis.
I am not clear about the magnitude of funds that would be freed up. They include the capitalist’s bank accounts, rent from property and income flows from shares and debentures. Of course with any financial collapse earnings will be down and some assets will be lost through bankruptcies.
Spending should be on projects that will increase future productivity. Things that come to mind:
- transport and communications infrastructure
- research and education facilities
- construction of factories and distribution facilities ready for next generation automated plant
- demolishing obsolete facilities and clearing in readiness for future use
- better training and education outcomes.
I imagine this post will intrigue some and annoy others.
Anyway, posts will not be as frequent as they were when I started the blog back in December. My focus at the moment is not amenable to that sort of output.
One thought on “100% Wealth Tax”
David, a wealth tax of a 100% or something similar, is part of a response. We can follow the lead of the Icelanders jailing bankers.
I know in the manifesto progressive taxation was one of their 10 demands, though in the Grundrisse Marx was less than enthusiastic about progressive taxation.
With the paucity of current politics discussion of a wealth tax is worth raising.This however can only be one part of our ‘program’.