Has any country tried a system with very high taxes on the wealthy combined with high minimum wages that “trickle up”? That seems to me to be the obvious solution, assuming that by wealthy we focus on the likes of Elon Musk, Jeff Bezos, Mark Zuckerberg, etc. rather than entertainers who earn a large salary like Taylor Swift and Dak Prescott or highly specialized technicians like engineers, doctors, and lawyers. Bring back the Eisenhower style tax rates and give them a try. If Hillary had won in 2016 and 2020, and Harris had won last year, and the 3rd most conservative justice on the SCOTUS was Merrick Garland (after Clarence Thomas and Samuel Alito), I think it’s possible we would be poised to try such a strategy. Combine that with an Al Gore victory in 2000 and 2004 and Merrick Garland being the 2nd most conservative justice on the SCOTUS after Clarence Thomas, and we would probably already be there.
We were talking about the last 20 years, not the entire post-War history of the US.
Capitalism always had its dysfunctions, often huge ones, but my point is that it stopped working permanently in the 1970s with a few respites, and then the respites stopped after 9/11, and now people don’t see a way forward. Switching between right- and left-flavored versions of the Template is not going to change that.
I just think the whole “End Of History” bargain that we got after the end of the Cold War was not something that was going to last forever.
But I think with the “End Of History” we had an end to ideas as how to reframe the world. So if a world like that starts breaking apart, a seemingly finished society, it’s going to seem chaotic and not well understood by those who prefer ordered systems. Which is a lot of historians. Because all of the ordered ways to reframe society have been rejected. Hence End Of History. So the only way to break through all of that is to be irrational. So USA chooses an irrational, chaotic actor.
Even in Star Trek yeah Earth was united, but other planets took the place of other countries. There were still other societies with their own ideas. I think the One World Society was going to fail at some point.
I think this is a weakness in the approach.
Rather than go OT, here, I’ll refer you to a specific post within a thread I started a few years back:
One person who wanted to change those tax rates was JFK himself:
The UK also had extremely punishing tax rates at the time. Many other European countries did too. So yes, it’s been tried.
The main problem with “soak the rich” is that it doesn’t raise all that much money, since there aren’t that many super-rich people. Google tells me there are 759 billionaires in the US. Fine, let’s take a whole billion from each of them as a one-time tax (not possible as very few of these people are that liquid, but let’s proceed). $759 billion ready to redistribute. Google also tells me that the US federal budget for 2024 was $6.75 trillion, meaning that $759 billion is just 11.2% of the budget. Not nothing, but not a lot.
Okay, how about soaking millionaires? Google further informs me that there are 22 million millionaires in the US–about 1 in 15 Americans. Very good. Let’s extract a cool million from each. Of course, again, much of that wealth is not liquid, tied up in family homes and such. But whatever. That would be 22 trillion, enough to pay the 2024 budget for 3.2 years.
That’s just a bit of the ol’ back of the envelope, but it shows you how little money we can reasonably get out of the super-rich–and most millionaires are not super-rich to begin with.
Plus, the rich are able to spend a lot of money to minimize their taxes and consume via other means (e.g., own a company that sends you to a lot of “conferences” in desirable destinations, etc.). Sometimes they just flat out renounce their citizenship and take their money elsewhere.
Taxing the rich can also help moderate their power, but a lot of their power comes from ownership, not money itself. I get frustrated by the media’s constant bleating about Elon Musk being “the world’s wealthiest man.” His money is largely irrelevant,* and I doubt he has a lifestyle that is much better than the above-mentioned doctors and lawyers. He is powerful because he controls these companies and associates with people of similar status and power.
*In the sense that the benighted masses associate with money; i.e., being able to buy a lot of stuff.
I have to respectfully disagree with this. Trump actually doesn’t have to do anything. If anything he just has to refrain from acting, and let the bad stuff happen.
And wrt starting WWIII, again, Trump doesn’t have to do anything. Just let aid and support to Ukraine peter out and, at some point the rest of reasonable Europe and NATO will actually have to (I hope) take far more active action in support of Ukraine.
I agree with you. He could start WWIII through omission/action as well as commission/inaction.
I was just trying to say in a shorthand sort of way that Trump would have to do (or not do) something really big in order to match the destructiveness of Dubya.
Very little argument there, except I believe the tipping point was Reagan in the 80s.
My question is why? Money was good in the early 80s and jobs were plentiful. Inflation just meant that you got %15 raises. Why the move to the right.
Again, maybe I’m being shortsighted, but there seems to be something missing here. If those top 0.1% really do have 2/3 or whatever large percentage of the wealth, then how does taxing them not cover the bills? Let’s assume we consider a wealth tax in addition to income taxes. The only way it doesn’t is if we’ve reached a point where we’re spending more as a nation than we’re producing, including the production of the ultra wealthy. I know that the government runs a deficit, but I wasn’t aware that the nation as a whole is running such a deficit.
True, but the %70 marginal tax rate made money available for start ups. In 1970 you just had to raise your hand to get investor dollars. That is a major plus for an economy. Start ups like Intel and National Semi peeled off of Fairchild and guys in a garage had no problem starting Apple.
I think there is a difference between the political tipping point and the economic tipping point. Reagan’s win was directly tied to a bunch of problems that Carter couldn’t fix, such as inflation (though Carter’s Fed chair appointment of Paul Volcker eventually helped) and especially the Iran hostage crisis. Reagan himself was then popular and arguably successful in his first term, so one could see him personally as the driver to the right. He was leading, in other words, whereas I think Trump is not, serving instead as the avatar of the American political id.
I think you could see the post-War American Dream, or rather, the American Deal start to unravel in the 1970s: i.e., graduate high school and work hard, and you can have a house, spouse, kids, etc. Go to college and probably do even better. You had the worst inflation in living memory (the Great Depression was not characterized by inflation but rather deflation), two oil shocks, rapidly changing work environments, etc. Don’t get me wrong, compared to today, it was a bonanza if you were white and educated. My dad could get fired from one big company and land a job in another without any problem. But the signs of things to come were visible.
Once inflation was under control, the 80s seemed like a return to normalcy in some ways. But the increasing avarice and viciousness of the corporate world did not escape the notice of pop culture, with movies like Wall Street, Other People’s Money, and Bright Lights, Big City coming out, as well as books like The Bonfire of the Vanities. Why do a bunch of corporate raiding and mergers and whatnot? Because the opportunities for simple, uncomplicated growth were starting to diminish. It only took 10 years or so for the image of the American company to go from “ALCOA Can’t Wait!” to Gordon Gekko.
The early 90s gave us a nice recession, which did in Bush Sr. And I think I’ve covered the rest. Conservative Clinton rode some nice trends in the latter 90s up while riding American manufacturing down. After that, we’ve had pretty much a disaster.
Perhaps, but tax rates like that traditionally hit a lot of people much further down the food chain.
Also, in the 1970s, we were still very much in the era of low-hanging technological and economic fruit. Jobs and Woz could start Apple in a garage because that opportunity was there. Today, you have all of techdom with their heads up the ass of AI because they can’t find a sellable idea anywhere else.
Self interest isn’t the point. Hate is the point. Large portions of the population are perfectly willing to suffer as long as the people they hate suffer too. They’d rather drive society off a cliff than drive it to paradise, since the most important thing in their life is hurting the people they hate. As long as “Those People” end up smashed by the crash they’ll be ecstatic, no matter what happens to them.
Wealth taxes are famously messy for both government and taxpayers. Compare totaling up your income for last year (fairly concrete) to totaling up everything you own and the current market value. Now imagine auditing both calculations. It’s why they’re really not used much by countries any more, and countries that use them often limit their scope:
A lot of wealth is tied up in illiquid assets such as real estate or ownership in companies (a large stake in a public firm such as Elon has in Tesla, is never liquid except in small pieces, while stakes in private firms are difficult to broker). We already have property tax on real estate (although this is local), corporate income tax on companies, and income tax and capital gains tax on the money that individuals extract from their dividends from and stock shares in companies, not to mention estate taxes, so it ends up being a bit of double taxation anyway.
Further, wealth as opposed to income is a thing, not a cash flow, which means that someone does not automatically have the money on hand to pay a given wealth tax. The fact that Elon has a fuckton of Tesla stock says nothing about his bank balance. He probably isn’t, but there are many people with stakes in startups, etc., that are cash-poor. As well as people who have inherited real estate, etc.
Here it’s instructive to look at the ratio of gross national product (GNP) to government debt:
The ratio for the US is 121%; that is, in order to pay off completely our current government debt, we would need to pay the entire economic output of 1.2 years. We are on the high side, but Japan is an absolute disaster at 251%!
Sadly, you’re absolutely right about the current US. But I don’t think you would have been right until sometime after the year 2000…
That’s depressing.
No, America has always been like that. It a nation that was built by and with hatred and bigotry.
“If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.” – Lyndon B. Johnson
A more recent comment of uncertain origin:
“The salient fact of American politics is that there are fifty to seventy million voters each of whom will volunteer to live, with his family, in a cardboard box under an overpass, and cook sparrows on an old curtain rod, if someone would only guarantee that the black, gay, Hispanic, liberal, whatever, in the next box over doesn’t even have a curtain rod, or a sparrow to put on it.”
Even our ideal of capitalism is less about greed than about denying wealth to as many other people as possible. Hatred and cruelty are the core essence of America, something we built into it in our efforts to justify slavery and genocide at our founding. And as the twig is bent, so grows the tree.
Oh, it’s certainly big, about 25% larger than Alaska, its closest US analogue. However, about half of it lies farther north than any part of mainland Alaska. In addition, the Greenland Ice Sheet covers about 80% of its land. The amount of Greenlandic territory that isn’t under ice is less than Alaska’s ice-free territory.
I’ll quote Wikipedia regarding Alaska’s economy:
The oil and gas industry dominates the Alaskan economy, with more than 80% of the state’s revenues derived from petroleum extraction. Alaska’s main export product (excluding oil and natural gas) is seafood, primarily salmon, cod, pollock and crab.
Employment is primarily in government and industries such as natural resource extraction, shipping, and transportation. Military bases are a significant component of the economy in the Fairbanks North Star, Anchorage and Kodiak Island boroughs, as well as Kodiak. Federal subsidies are also an important part of the economy, allowing the state to keep taxes low.
This seems to me to be the economy an American Greenland would enjoy. It makes sense in a way. One of Greenland’s problems is too much ice and, what do you know, there’s a whole bunch of medicine that’ll thaw it right out just sitting underground ripe for the taking.
I think this attitude is about to get challenged. The US was able to convince almost every American (myself included) to conflate being the richest, most powerful country with being “The Best Country in the World,” whatever the hell that means. To maintain our “way of life” requires us to continue to be the richest, most powerful country in the world. I know it’s clichéd to point out that Trump is a reality show star but I think it’s useful to point out that Trumpian Realpolitik is more accurately termed Realitypolitik. It looks like Realpolitik but only on camera.
Do you think that the US is worse than other countries by its nature? Because you can usually point to any country and find a history of imperialism, exploitation, etc.
E.g., I lived in Japan for eight years and knowing and using Japanese is my job. Japan was a horrible country in the 1930s and 1940s. I don’t think current generations there, however, are tainted by those bad actions.
Personally, I don’t see countries as unified Aristotelian substances, so to speak.