On January 31, 2019, Chuck Collins writes on The Hill:
Sen. Elizabeth Warren (D-Mass.) has jolted the body politic with a bold proposal to tax the concentrated wealth of the richest 75,000 householdsin the United States. It’s about time someone took up this mantle.
Warren’s proposal would levy an annual 2 percent tax on wealth over $50 million, with the rate rising to 3 percent on wealth over $1 billion. Jeff Bezos, the wealthiest man in the country, would pay $4.1 billion under the new tax.
The United States has a proud tradition of breaking up concentrated wealth. The first federal progressive income and estate taxes date from the first Gilded Age, over a century ago. That’s when President Theodore Roosevelt observed, “Of all forms of tyranny, the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.”
The wealth tax that Warren proposes would raise substantial revenue — by one estimate almost $3 trillion in the next decade. This would be a substantial boost for spending on green infrastructure, affordable higher education, and other investments that could expand opportunity.
But more fundamentally, the tax would be an investment in protecting democracy from the “tyranny of a plutocracy” that worried Roosevelt. Today’s massive concentrations of wealth also are concentrations of political and economic power, which are disruptive to democracy, social cohesion and economic stability for everyone.
Over the past four decades, wealth has flowed upward into the hands of the wealthiest 1 percent at an ever-accelerating pace — they now own 40 percent of the nation’s wealth, while the share owned by the bottom 90 percent has steadily fallen.
The higher you go up the economic ladder, the more concentrated wealth becomes. The Forbes 400, the richest billionaires in the United States, own more than the combined wealth of nearly two-thirds of the United States — including all black households, plus a quarter of Latino households, combined.
In fact, three men — Bezos, Bill Gates and Warren Buffett — are wealthier than the entire bottom half of the country combined. And while politically active wealth dynasties such as the Walton, Koch and Mars families have seen their wealth skyrocket by over 6,000 percent in recent decades, median American wealth is on the decline — and 1 in 5 of us now has zero or even negative wealth.
Most progressive solutions to this inequality have focused on taxing income at the very top at a higher rate. But taxing income alone fails to address these multi-generational icebergs of wealth and power.
Warren’s idea has ample precedent. Several European countries — including Spain, Norway and Switzerland, among others — have annual net worth taxes. Most tax over a very high threshold. (The French solidarity tax, before it was abolished by President Emmanuel Macron, applied only to assets over $1.4 million.)
In fact, we already tax wealth in various forms here in the United States. The federal estate tax, our nation’s only levy on the transfer of inherited wealth, was established in 1916. It is paid exclusively by multi-millionaires and billionaires, starting at $11.4 million for an individual and $22.8 million for couples in 2019.
Most local jurisdictions tax wealth in the form of property, such as real estate and cars, based on their value. Middle-class families pay these taxes all over the country. What’s missing is an annual wealth tax focused on the billions held by those at the top.
Like a century ago, today’s extreme wealth inequality requires a direct tax on wealth. A once-in-a-lifetime estate tax, or a more steeply progressive income tax alone, will not put a sufficient brake on dynastic wealth. Warren’s proposal would galvanize a populist movement that has been pointing out for decades the corrosive impact of concentrated wealth on our body politic.
https://thehill.com/opinion/finance/427315-a-wealth-tax-could-raise-trillions-and-save-our-democracy?fbclid=IwAR3gR9tt8uGTdWUKPyMDSCqH_-9HT43iyWFNpymDvIq4atpoJO_fUfkoy1Y
Gary Reber Comments:
Yes, we desperately need to address concentrated productive capital asset ownership, a term Elizabeth Warren never uses, but what is the reality of why the wealthy are wealthy.
But that won’t solve our problems as the wealthy capital ownership class will still own the productive capital assets.
We need to empower EVERY citizen to become productive by becoming an owner of productive capital assets formed in the future and prevent further concentration of capital wealth ownership.
That is what would be accomplished with the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/…/capital-homestead-act-a-plan-for-get…/, http://www.cesj.org/…/capita…/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/…/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/…/ch-v…/capital-homestead-accounts-chas/
But Elizabeth Warren never talks about creating new productive capital asset owners, nor do any politicians or a potential President, instead always about redistribution of wealth through taxation.
We are owned by the few people who OWN the corporations growing the economy.
Listening to most of the experts, it seems that capitalism and socialism are the only alternatives to how an economy can be run. Since capitalism is defined here as concentrated private ownership of capital, and socialism is defined as State ownership of capital, that leaves no place for a system in which every child, woman, and man has the opportunity and means to own capital. Or are there principles other than those which seem to mandate the way things are now?
If you haven’t figured it out already, these billionaire individuals and families are wealthy because they OWN productive, wealth-creating, income-producing capital assets, acquired through a system that requires past savings in order to take the risk to invest.
The solution should be obvious. That is to empower EVERY child, woman, and man to acquire personal ownership stakes in the productive capital assets formed in the future economy, without the requirement of past savings and without having to be subject to personal financial risk. This solution is the essence of the proposed Capital Homestead Act, a modern-day Homestead Act, but instead of land ownership it is the non-human productive capital assets that are the primary means applied to producing goods, products, and services.
The rise of billionaires and millionaires is the result of a system that facilitates concentrated wealth-creating, income-producing capital asset ownership in viable business corporations.
What we need to do is to focus on the financing of new wealth-creating, income-producing capital asset projects, while simultaneously creating new capital owners. We need to incentivize the corporations growing our economy to pay out their full earnings to their owners and stop their practice of retained earnings and corporation debt financing. We need to empower EVERY child, woman and man to acquire ownership in the growth of viable corporations, purchasing new stock issues representing new capital asset formation. The financing needs to protect commercial banks from risk of default on the capital credit loans issued, using capital credit insurance. The loans need to be interest-free and solely repayable out of the future earnings of the investments in the corporations growing the economy with viable projects and expansion of their operations. Citizens should NEVER have to have past savings to pledge as loan collateral security, or reduce their earnings and benefits from employment. We need to create an economy where workers, as individuals, own the corporation they are employed by. There should be no requirement to be employed so that other citizens not employed by business corporations can use the financing to purchase new full-earning payout and voting stock issues, repayable out fo the future earnings of the investments.
Under the JUST Third Way’s more just and simple tax system, access to ownership of the means of production in the future would by provided to every child, woman and man by requiring the government to lift all existing legal and institutional barriers to private property stakes as a fundamental human right. The system was made by people and can be changed by people. Guided by the right principles of economic justice, “we the people” can organize and demand that the system be reorganized to make true economic democracy the new foundation for true political democracy. The result of this movement of new justice-committed leaders and activists will be inclusive prosperity, inclusive opportunity, and inclusive economic justice.
The following is proposed:
• Eliminate all tax loopholes and subsidies.
• Provide an exemption of $100,000 for a family of four to meet their ordinary living needs.
• Encourage corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full-voting, full-dividend payout shares for broad-based citizen ownership.
• Eliminate the payroll tax on workers and their employers, but
• Pay out of general revenues for all promises for Social Security, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.
• Establish a single tax rate for all incomes from all sources above the personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt, but the poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes which under some tax proposals would be exempted from any taxes.
• As a substitute for inheritance and gift taxes, impose a transfer tax on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
• The Federal Reserve would stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and
• Begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to purposely acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.
• The CHAs would process annually an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets.
• The shares would be purchased using interest-free capital credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods, products and services produced by the added technology, renewable energy systems, manufacturing factories, rentable space for entrepreneurial endeavor and infrastructure, both repaired and new, added to the economy.
• Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but
• Would not require citizens to reduce their funds for consumption (savings) to purchase shares.
The end result would be that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elites control the coercive powers of government.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/…/the-just-third-way-basic-principles-…/, http://www.cesj.org/…/…/2014/10/jtw-graphicoverview-2014.pdf and http://www.cesj.org/…/the-just-third-way-a-new-vision-for-…/.
Support Monetary Justice athttp://capitalhomestead.org/page/monetary-justice.
