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Posted by Stan On June - 9 - 2019 0 Comment

In May 2019, Ben Steverman in Bloomberg Businessweek reviewed the Economist Gabriel Zucman, “The Wealth Detective “ and the new army of economists remaking economic theory. Professor Gabriel Zucman studied under Thomas Piketty in Paris, the author of “ Capital in the Twenty First Century” (2013). Professor Zucman , along with colleague Emmanuel Saez, estimate that the top 0.1% of tax payers – about 170,00 families in a country of 330 million people – control 20% of the American wealth, the highest share since 1929. The top 1% control 39% and the bottom 90% have only 26%. Zucman also found that multinational corporations move 40% of their profits, about $600 billion a year, out of the countries where their money was made and into lower-tax jurisdictions.

https://www.bloomberg.com/news/features/2019-05-23/the-wealth-detective-who-finds-the-hidden-money-of-the-super-rich

With the 2020 election on the horizon, we are seeing various proposals to save Capitalism from all political sides. Elizabeth Warren proposes a wealth tax to bring in $2.8 trillion over the next decade. Zucman challenges a series of assumptions, e.g., unfettered globalization is a win-win proposition, low taxes stimulate growth, and super profitable companies prove capitalism works. In 1980 as Reagan took office, the top 0.1% controlled 7% of the nation’s wealth. By 2014 it went to about 20%. With Reagan, Clinton, Bush and recently Trump cutting taxes, inequality has continued to increase in US. Inequality is less in some EU countries.
Zucman argues that tax cuts have merely enriched the rich and further incentivized greed. He supports Warren‘s wealth tax, which would levy 2% on fortunes greater than 50% million and 3% on those higher than $1 billion. For corporations who are able to ship profit abroad to low tax havens like Netherlands, Singapore , Switzerland and the Greater Caribbean he proposes to “ annihilate” such competition by apportioning profits based on where sales were made. Some years ago, Switzerland voted on a proposition to keep a 12 to 1 ratio of CEO to worker pay. While it did not pass, the debate was important. We are going to hear many proposals given the growth of homelessness, the opioid crisis, student debt, and climate disruption. So we need to prepare.
Beware of simple-minded debates about Socialism vs Capitalism. We have corrupt socialist and capitalist national models in many locations. Social or socialistic capitalism may best describe most relatively well-functioning economies, from Sweden, UK, France , Germany, Canada and USA .
Zucman and Saez have a new website to review their research www.wealthtaxsimulator.org
You may find Hamilton and Zewde recent book interesting, “Rethinking Wealth: Baby Bonds”. https://www.povertycenter.columbia.edu/ is a site you may enjoy also.

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Stan Ingman has written 11 post for this site.

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