Quantcast
Channel: waterstreet2013
Viewing all articles
Browse latest Browse all 48

UPDATE: Wealth Tax -- Solve the Piketty Dilemma With Amendment XXVIII Intangible Property Tax

$
0
0

The Piketty Dilemma forms up as capital investments generate profits at a rate that is higher than the overall growth rate of an economy. You want growth, but the profits from growth are concentrated. Profits do not spread out. And this continues over decades without much in the way of limits. Capitalism has no internal restraints to stop it shy of a culture of dynasties and government by oligarchy.

The difference between return on capital and rate of growth is running about 2% annually. Put bluntly, this is the unbalanced excess that is driving America into oligarchy. It has already moved Wall Street's Masters of the Universe outside the reach of criminal law.

We need to dig in for the long, difficult process to get this constitutional amendment and take back 2% annually from the wealth of the billionaires:

Amendment XXVIII

The Congress shall have power to lay and collect taxes on wealth in the form of intangible property, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

This amendment will not be easy to obtain. However it is essential, going forward into the 21st Century to halt further movement into oligarchy.

We can expect that it will take decades to push through a new amendment. There is nothing easy, politically, about this project.

Charles Murray documented societal destructions with his book Coming Apart: The State of White America, 1960-2010."The Great Unraveling" by Krugman works the economics of this change. "The Unwinding" from George Packer covers these same social problems, the same coming, tumbling in harness, of this destruction of the middle and lower income classes in America. Thoughtful conservatives and liberals see the same things.

Now we have Thomas Piketty with Capital in the Twenty-First Century explaining how weakly taxed capitalism is on a roll to make this mess permanent.

California and Florida have Intangible Property statutes. But this has to be implemented federally to get the reach and access needed for effective implementation:

-- Set up non-punitive revenue yields. Start at IP Net Worth above $10,000,000 (at 1/10th of 1%.)

-- Set a maximum rate for IP Net Worth over $1-billion (at 2% per annum.) That 2% figure matches the ROI-to-growth excess. This is where you limit the effects of the Piketty Dilemma.

-- Holdings in offshore financial institutions are not exempted. Same for assets shielded in "family trust" accounts and other "financial planning" tools. Tax At Source is the rule, forcing identification of the beneficial owners of this wealth or else paying the full 2% by default.

Of course this change helps with federal deficit reduction. It also adds a factor to deter Big Bubble stock and real estate price explosions. The Federal Reserve Bank had been shoveling out $85-billion a month and then more recently $65-billion a month through the banks. You know that ended up disproportionately in the pockets of the .001%ers.

We need to use our democracy to do claw back. As soon as possible. We need a tax system that corrects flaws from the last 30 years, working steadily over time. If we are to have government "of the people, by the people, and for the people" then there is no choice.

We need to get at it.


Viewing all articles
Browse latest Browse all 48

Latest Images

Trending Articles



Latest Images

<script src="https://jsc.adskeeper.com/r/s/rssing.com.1596347.js" async> </script>