Tax the rich! Make America affordable again!

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This is a thread in which I will write about and dig up articles about the evils of extreme wealth inequality and the benefits of relative (though not total) equality.

I advocate neither pure socialism nor pure capitalism. All of the world's most successful economies have been mixed economies, neither purely capitalist nor (attempts at) purely socialist. The trick is, finding the right mixture. Some mixtures work well, others don't.

Here in the U.S.A., we had relative equality during the middle of the 20th century, thanks to Roosevelt plus a general consensus within the "liberal Establishment" about the need to "save capitalism from itself." Among other economic redistributionist measures, there were very high taxes, of various kinds, on the rich.

A lot of things were done right back then, resulting in the most prosperous (for the majority of people) era the U.S.A. has ever known, the 1950's and 1960's.

I'll post links to relevant stuff as I happen to come across it.

For now, here's a video I just happened to be watching just now, dealing not with the U.S.A. but with Japan:


What Eating the Rich Did For Japan

More later, including more U.S.A.-specific stuff.

Not an American here and living in a definitely mixed economy, not huge but very resilient. I tend to think of economies as ecosystems - they can't be really controlled with all their complex dependencies. The point is to keep the ecosystem healthy and self-propelling without getting toxic.

I think "saving capitalism from itself" is quite an accurate concept. People in the 50s and 60s had Great Depression in living memory. They likely didn't want to repeat it.

"Eating" the rich is a slogan that calls to violence. As if the rich are not human beings entitled to human rights as is the right to property. To "eat" the rich means weaponizing
the state bureaucracy against a group of people who are entrepreneurs who constantly are finding new, more efficient ways to utilise resources, including human labour. See what eating the Rich did for Venezuela instead.

^ That would have been true in a healthy market economy.
Unfortunately, various crises bugging a given society (repeating financial crises, wages below survival and mass homelessness, to name a couple) are an indicator the system is not entirely healthy and it needs corrections.
I believe this has been studied back in the 19th century, when anti-monopoly laws were introduced. Unfortunately, "creativity" of some modern enterpises (e.g. Amazon) were all about finding new ways to bypass these laws.

As I already said in some other thread, instead of worshipping the Invisible Hand of Market, we should care for it to keep it healthy.

How much money would you get per person? If you taxed the rich and divided it up amongst the general population?

That's a bad idea.
If you look at successful mixed economies, they don't give much money to citizens. They invest this money in infrastructure, education, healthcare, affordable housing and so on. Things that are believed to benefit the whole society*.

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* Yes, affordable housing benefits everyone, preventing losses caused by large homeless population.

The economic crisis wasn't created by the market, it was created by the governments. First they shut down their respective economies due to pandemic, then they printed money through the federal reserve and the similar institution each country has. That created massive inflation and disturbances in the market. It will take quite some time until the waters calm down. That is unless the government doesn't intervene again with their "ingenious" grand plans.

Have you ever heard of the Cobra Effect? It is a term that describes state interventionism with unintended consequences. It's also a real occurrence that happened in British ruled India. The authorities there, were concerned with the amount of the Cobras and the risk that entailed for the people. They decided to incentivise the elimination of Cobras by rewarding whoever brought them a Cobra. What happened was that some thrifty Indians began breeding the Cobras in order to increase their revenue from the rewards. Eventually the British authorities cought up and discontinued the rewarding. Then the Cobras breeders lost their incentive to keep the Cobras and released their multiplied Cobras back to nature. As a resault the intervention by the British yielded the opposite consequences from what was intended. This is what happens basically with every interventionist state policy. While the free market is a naturally occurig ecosystem. Every culture in history functioned through the mutually beneficial, voluntary exchange of goods and services between individuals, that is the free market. What you are complaining against is not the free market but an insider trading crony capitalism who is largely generated by the power that politicians have to intervene with laws and regulations. Take that power away and you have free market again, with less inequality and more opportunities for everyone to get out of poverty.

I was refering to the pre-pandemic crises, e.g. 2008.

However, covid did expose fragility of American economy. Here, we didn't have shortages at any point. We have an incompetent and corrupt government but we also have quite a healthy, diverse and resilient market in most sectors.

Some things that are rarely done, but should be:

1) Identify the rich.
2) Decide how much you are going to take from them.
3) How do you make sure they don't just run off to a tax haven? Are you going to reverse globalisation (with serious short term consequences) in whole or in part just to tax them?
4) How is your taxation going to change their behaviour and investment strategies? What effect is that going to have on your revenue (and therefore tax take) short term and long term?
5) How much of a difference is that extra money really going to make?

What you often find is people saying "eat the rich" don't have a real plan, rather it's usually just an envious, hate-filled PR campaign that falls apart as soon as you ask for figures. There aren't actually that many rich people however the lines are drawn, so while you might feel better taking all their money - it's probably not going to make a real difference to the average person - the main tax base has always been the middle and working class, through sheer numbers. Also what worked during the 20th century, might not work at all in the internet age. The internet has assisted globalisation immeasurably and cannot be ignored if you want to follow this kind of policy.

Eat the rich! Oh by the way, if you have a job or are retired, you are the rich just doesn't have the same ring to it.

That's not to say I would necessarily fight against such a campaign, less globalisation is good and the super rich are often annoyingly politically active (in stupid damaging ways) and deserve to be taken down a peg, but I don't believe that doing so would make things better for most people, at least not in the short term.

I find this the most interesting point - and most promising.
"Cut the chimney" progressive 90% taxes like they have in Nordic countries aren't designed to be paid - they are designed to discourage CEOs from pocketing huge parts of the company's money.

So, from this point of view, designing a tax system that promotes a desired socioeconomic structure is a really interesting field of research.

There is always the other side of the equation - the opportunity cost, which is harder to calculate (maybe even impossible). How many companies are not set up or set up elsewhere because of this? I don't know about the Nordics but I do know that for the longest time France has lost much of its most entrepreneurial youth to London where they stand to reap more of the rewards from risk. Is France better or worse off due to this? It is hard to say.

And God only knows how many Europeans in general have been lost to America... it's a significant factor in Europe's stagnation relative to the U.S.

And yet another sides of the equation - the social costs, environmental costs, resilience of local economies, livability of various places... is infinite growth always a good idea?

Societes and economies are fascinating complex systems.

You're preaching to the choir, I'm not a supporter of things as they are or of neo-liberal global capitalism in general. But that does not a neo-socialist make. I'm just sounding my usual note of caution and providing an antidote to ill-thought-out slogans.

Well, certainly "eat the rich" is a very stupid slogan
"Tax the rich"? Not stupid in general but plenty of free parameters to consider.

I think she should pitch that to the rich, since they're the PIC. We, peasants, don't make those kinds of decisions.

Venezuela is not where it is because of socialism.

It was a dictatorship which collapsed on it self, and there is violent in fighting between very powerful political orders.

Mostly Venezuela was object to out side manipulation from US who owned their oil fields for sometime.
As vengeance of US has no limits they screw everyone over who tries to screw them over.
Not saying US is sole reason Venezuela is screwed, but US did its very best to burn the economy in constant meddling in their political affairs.

More importantly the current establishment is lunatic. They are about as socialist as Caligula.