- The American Prospect writes about Thomas Piketty's work on inequality - and how we're just scratching the surface of the policy implications of a new gilded age:
Piketty is rightly pessimistic about an immediate response. The influence of the wealthy on democratic politics and on how we think about merit and reward presents formidable obstacles. Fierce international competition for the rich and their dollars leads Piketty to believe that without a serious countermovement, capital taxation will trend toward zero. Inequality is becoming a “wicked” problem like climate change—one in which a solution must not only overcome powerful entrenched interests in individual countries but must be global in scope to be effective.- Meanwhile, Toby Sanger comments on the need to put capital to work in the public interest. And Erin Weir notes that the cash sitting idle in Canada's corporate coffers could more than pay off the national debt.
Nonetheless, it is capital taxation, and ultimately global capital taxation, that Piketty sees as the eventual solution. Taxing only consumption and labor income violates the notion that citizens should finance the commonwealth on the basis of their ability to pay. A global capital tax—modest, progressive, based on transparency—could reinforce the fraying link between economic standing and individual contributions toward vital collective activities. Moreover, halting progress in this direction has already taken place, as rich countries seek—without great success so far—to crack down on the tax havens and corporate financial engineering that increasingly make taxes voluntary for the superrich. Because wealth is still so concentrated in advanced industrial nations, agreements that covered citizens of and transactions within Europe and North America would go a long way toward bringing these activities into the open. A modest tax on the largest fortunes might also encourage more productive uses of capital, gradually taxing away big estates with small returns.
- But Mark Gongloff points out that the corporate actors most eagerly siphoning money out of the U.S. are the same ones demanding that public policy be used to keep wages low. And Ben Judah notes that the UK's role as a global money laundromat has led it to fight for tax evasion.
- Adam Hersh and Jennifer Erickson propose a set of progressive principles which can be applied to trade agreements. But I do have to wonder whether the focus on such agreements serves any useful purpose to begin with.
- Finally, Ivan Semeniuk discusses the effect of poverty on brain development - making it clear that anybody putting off action to ensure a reasonable standard of living for every child is taking a distinct stand against a reasonable opportunity for everybody.