Thursday, February 18, 2016

piketty fences

Thomas Piketty, the French rock-star economist & now a columnist for the Guardian (UK), makes a convincing argument that whether Bernie Sanders wins or loses the presidency this year, a new era of progressive politics in the US has already begun.

In his Guardian column on Tuesday, Piketty wrote that * From the 1930s until the 1970s, the US were at the forefront of an ambitious set of policies aiming to reduce social inequalities. Partly to avoid any resemblance with Old Europe, seen then as extremely unequal and contrary to the American democratic spirit, in the inter-war years the country invented a highly progressive income and estate tax and set up levels of fiscal progressiveness never used on our side of the Atlantic. From 1930 to 1980 – for half a century – the rate for the highest US income (over $1m per year) was on average 82%, with peaks of 91% from the 1940s to 1960s (from Roosevelt to Kennedy), and still as high as 70% during Reagan’s election in 1980.*

He then explains why confiscatory income tax rates on incomes over $1m/yr as well as high estate taxes are necessary for any society wishing to avoid concentration of wealth and widespread poverty. Piketty uses standard academic scholarship to make his argument, backing it up with facts as in the quoted paragraph.  This technique isn't original, but it seems brilliant coming at a time when for decades, economic theory in this country has consisted mostly of platitudes and bromides about *freedom.*

And the facts are as well known as any other history. We've known for some time that if our goal is to redistribute income in a society, then an income tax devised for that purpose is the simple and easy way to do it. The money derived from the tax is then distributed to those in need, as health care benefits         and government pensions, housing subsidies, child care for working mothers, etc.

EZ-PZ, & it ain't rocket science. The only thing missing in the US, keeping us from achieving this goal, is the loud and insistent voice of the people, who up until now have been incredibly passive & complacent, at times even participating in political schemes that lead to their own impoverishment.

The arrival of Senator Sanders on the national scene has hopefully put an end to our collective helplessness. We need to make demands on those who rule, starting today, 

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