WHEN THERE'S WILL...THERE'S A WAY...
....TO END ECONOMIC HARDSHIP AND INEQUALITY
It is an indisputable fact that the wealth we have all helped create sits in the hands - or the bank accounts to be more accurate - of a few.
It seems only fair to create a more equitable approach to wealth distribution.
One obvious and practical approach for returning the wealth to all of the wealth creators is through a tax on wealth.
Indisputable. Fair. Practical. That's a good start. But -- who would pay?
Well, the top 1% of the population own assets worth $30 trillion. This translates to folks with over $8.4million in assets representing 35% of US household wealth. An annual tax of just 2% on these assets could raise $600 billion. This proposal will not cause hardship but will go a long way to sharing the wealth we all help to create.
How can we be certain this approach wouldn’t cause hardship? The numbers speak for themselves….. Global private wealth grew by 8% in 2014. So, if you had $8.4 million in assets you could realistically expect your portfolio to have increased in value by $672,000 – which is 13 times the US median wage. Now, if a quarter of that $168,000 went in tax (2% of the net asset value) it certainly doesn’t represent any meaningful hardship or impact on lifestyle as it will only affect those with an unusually high standard of living.
Not only does this give the means to channel wealth to everyone who had a hand in creating it, it can also begin to fund truly progressive initiatives such as the abolition of income tax for the lowest of income earners (you can find more about this in From Here to Prosperity, authored by PPU Executive Director, Tom Burgess).
But wait, there’s more good news. A wealth tax on assets of $8.4million would take funds out of storage and back in circulation – stimulating the economy, creating jobs and creating a cycle of prosperity that many many more people can enjoy than the current 1%.
So let's start here. And, ours is not the only voice. Thomas Piketty supports a similar approach on a global scale. It is not just the progressive voices that support this approach -- Professor Ronald McKinnon of Stanford University outlined the ‘Conservative Case for a Wealth Tax’ in the Wall Street Journal in January 2012 where he was quoted as saying “there is a strong case for reforming income taxes—both the personal and corporate—to increase efficiency and generate more revenue. Because wealth will generally present a much larger tax base than income, tax rates can be kept very low and still raise substantial revenue.”
Progressive and conservative economists alike see merit in the approach. The challenge is to create the political will. If there is the will – there is the way. We are certainly seeing the will of the people manifest around the world to demonstrate their dissatisfaction with gross imbalances in power and wealth. A movement is underway and the time has never been better to once and for all put an end to antiquated tax systems that the rich can work around and the poor have to work their way out of.