There is a repeated concern about wealth taxes driving the 1/10,000 out of the country. As Zucman states if they move to Switzerland (or some other country) they still have to pay taxes as long as they remain citizens. If they become citizens of Switzerland there is a great benefit to the United States in that they would no longer be able to give money to political candidates and thus loose much of their influence.
But as is presently true of income tax, annual wealth taxes could be citizenship- based regardless of where one resides. Then if they want to revoke their U.S. citizenship, good riddance.
Excellent point, Milton. Clearly, the level of influence these individuals are exerting in the political process is really a much greater concern than the loss of revenue.
The elephant in the room is imperialism and offshoring. Krugman asks whether we could return to the post-WW2 recipe that seemed to work for a few decades, but it's a totally different economy now. The US kept most of the world poor by actions like the 1954 CIA coup against Guatemala to stop them from doing land reform to keep wages on a dirt floor. Fruit of the Loom could then relocate from Ohio to Guatemala to make underwear using $0.25/hour labor instead of $6/hour labor and those union jobs from Ohio are gone forever. Rinse, repeat with every industry that is not nailed down like carpentry that can't be offshored, but carpenters also get paid less because wages move as a field effect, of course.
Zucman was so close to sayng it here: ""So, for instance, changes in factor shares—labor and capital shares—have been partly affected by the decline in union power. When unions are stronger, you tend to get a bigger labor share. When unions are weaker, you get a bigger capital share. Also in the way that we organize international economic relations, globalization.""
He does touch on the need for international organization, which is to say "Workers of the world unite!" because ultimately that is what we the people need in order to become from from the global class servitude called capitalism. It hurts the people of the world immensely and also rots the imperial core, where the wealth Gini is up to 0.83 now. That's an astronomical number. Look up a recent US wealth distribution plot to see how obscene it looks. We the people need to take back ownership of the Earth from the oligarchs.
Many people who thought they were immune from the need to be in a union (e.g., highly-educated white-collar professionals) are learning that their corporate employers are now throwing them aside for AI cost savings of technology which doesn't get paid salaries, bonuses, sick leave, vacation, or 401k contributions.
I used to work in risk management in financial services. In just the past 9 to 12 months, I see numerous colleagues who made $175k - $275k per year have been laid off in favor of AI. One told me she felt lucky to find a much lower-level replacement position paying $120k so she and her husband in their early 60s with some medical problems, can make it to Medicare age.
Ironically, however, it’s people who really need unions that delivered the Trump catastrophe. Roughly 70% of the white working class voted for Trump. In 1980 the same people put Reagan in office. Why? The Southern Strategy of Nixon/Atwater worked. It still works. If “only” 60% of white working class voters had voted for Trump, we’d have a Democrat in the White House and probably control the legislature, too. The white working class doesn’t get all the blame, but it could not have been done without them.
The Republican Party has learned to leverage cultural issues to expand its voter base. People will vote against their economic self-interest if you appeal to some hot-button issue like racism, Christian fundamentalism, or white nationalism. If you appeal to a sense of victimhood and then give them someone to fear or hate for their victimization, you have the magic formula.
Or as LBJ is supposed to have said: "If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you."
I mean that the Republicans tend to be the "mean" ones, the ones who want to never increase (or even eliminate) the minimum wage, to get rid of housing assistance and rent control, to get rid of SNAP benefits, and anything else progressive, and Democrats are the ones who pretend to fight *for* them --- meanwhile never getting to the very root of the economic issues, because of course capitalism is the sacred cow or to use another large fauna metaphor, the elephant in the room that is hardly spoken about.
What passes as "politics" in the US imperium is all distraction from the main issues, while the false narratives fly fast and loose and keep the people churning on side issues and details and lies so the capitalists remain in power. It's so much. Just now I was looking at the lie that Daniel Ortega said there would be no more elections in Nicaragua, and it's all over all the media from LA Times to Democracy Now! --- blatant lies, as blatant as the claims that Iran killed tens of thousands of people in January. Trump said in his speech the number 45,000. Just a blatant lie.
From ~1975-2023, about $79 trillion was transferred from the US bottom 90% =>top 1%.
Those ppl may not KNOW about this, but they know their lives are worse than their parents, and white workers without college degrees made no progress, while they saw Dems favoring minorities and women, who DID progress, (tho minorities and women are still not as well off as white men.) This kicked off an epidemic of 'Deaths of Despair' (Drug OD, Alcohol, suicide), decreased life expectancy, a lot of anger, and fertile ground for the Tea Party/MAGA.
In 2016 & 2024, there was a huge number of voters who wanted CHANGE, and Corporate Dems offered mostly 'more of the same.' It was easy to stir up racism and sexism in favor of a candidate who would change things.
White working-class voters would have to be stupid to believe a union buster like Reagan would help them rise out of their declining economic circumstances. I doubt that they are stupid. I expect the distribution of intelligence in their cohort is about the same as in any other large cohort. No, the 70% of them who voted for Reagan (and for every other subsequent Republican candidate for president except in 1992 when Perot syphoned off some R votes) did so to improve their lives in another dimension: to make sure government benefits were distributed to them and not “welfare queens” (a code name for you know what). Your comment acknowledges this parenthetically, and it’s true the Democrats have not offered to govern in ways that improve white lives but not the lives of others. They have offered to govern in ways that raise the distribution of income and wealth to the working class generally, but that, without the racial discrimination component, isn’t what 70% of the white working class wants.
No question Big Money has harnessed White racism to elect Republicans, and Trump turned that up to 11.
But they've ALSO compromised Democrats with Big Money, so "Tax the Rich!!" Democrats get torpedoed, if necessary by coopting Black leaders (Clyburn in 2020) to elect Corporate DNC dems (even though Biden governed as a closet progressive.)
More than one thing can be true.
The white working class has been screwed by Republicans, but Dems sometimes REDUCED, but didn't REVERSE the tax giveaways to the rich and aren't full throated about reversing them. They'd rather fiddle around the edges with 'Affordability' than return ~$150,000/per person and $32k per year to workers.
The Dem's "Tax the Rich, sort of" policy is REALLY weak tea, offering to raise taxes a little on billionaire income, not wealth, merely slowing, not reversing the ongoing 90%=>1% steal.
"Democrats will make billionaires pay a minimum
income tax rate of 25 percent, raising $500 billion in 10 years".
Trump, stealing from the Left, often touched the truth when he spoke about the economy and those remarks helped defeat Clinton & Harrris and got him elected. He stole from Warren and said the “economy was a rigged system,” referred to himself as, “a nominee from outside the rigged and corrupt system,” and that, “we will eliminate the Carried Interest Deduction and other special interest loopholes that have been so good for Wall Street investors, and people like me, but unfair to American workers.”
He claimed, “This election will decide whether we're ruled by a corrupt political class or whether we are ruled by yourselves, the people. It is time to reject a failed political elite that has bled this country dry.”
All lies of course, but when the choice is between someone who says "hey, everything is fine, I'll make no changes" and someone who promises to wrench the wheel away from the rich and corrupt...well, the 20% of voters who don't know who their Senators are will fall for it.
Thanks for this rational and nuanced analysis. Democrats have not been hardnosed enough (or single-minded enough) about taxing the rich. I think this might sell with working class people, and it’s time to go all in, as AOC has done. I hope more people like her will be elected in November. That could turn things around. I think bigotry has been the deciding factor since 1968, but going all in on tax the rich might make a dent in that.
While we're at it, let's not forget the welfare work rules, which only serve to help further prostitute the job market, "hold the line on upward salary pressures", and punish people for being poor.
Yes, capitalists have tried to capture and santiize the arts and pretend there's a non-political realm called "art" and tried to demote powerful political art as merely "propaganda" or "social realism".
A couple years ago I listened to The Grapes of Wrath at the age of 50 with my stepson while driving him to his sports practices. We would listen in the car and it was so very powerful. Steinbeck created such a powerful work of art that shows how capitalism hurts real people and how the system effect of land control is the mechanism.
People are still creating such things but of course capitalists control most of the institutions like universities and the publishing houses and the art world for the most part and they exert influence which is obvious. But weeds grow in the cracks of the sidewalk.
Taxing everything above a billion, now that's a wealth tax! I like especially getting to have a dog park named after you. It preserves the best aspects of capitalism, while eliminating the excesses.
250 years ago, at the time Wealth of Nations was written, England had a wealth tax: people were taxed on the amount of land they owned and on the numbers of windows in their houses (which are easy to count from the outside). Adam Smith suggested a progressive income tax: “It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.”
As Zucman points out, if you do what every Republican president has done since 1980, and cut the income tax on corporations the stock goes up and investors increase their wealth without taxation. So, another possibility is to tax unrealized assets.
That had the unfortunate market distortion of reducing the number of windows people had on their houses, and hurt people’s health. Similar to the tax in France on the ground footprint of houses, which led to many houses with cantilevered overhangs.
I didn't say it was a good tax, only that they had wealth taxes in England 250 years ago, so it is not exactly a new concept. Incidentally, in Chelsea and some other parts of London you can still see elegant Georgian terraces with some houses still having bricked-up windows.
I was so pleased that Zucman is fairly confident of wealth taxes in the US in the near future. Let's hope he's right. Piketty was more doubtful 10 years ago.
Yes, that's another detail of the intersection of carpentry and economic policy! This stuff is fascinating and makes a perfect metaphor for Krugman's discussion with Zucman about wealth tax evasion!
I understand the point of that saying, but I prefer a more integrated holistic solution that does not lead to obscene unearned wealth accumulation to begin with. I think we need a right to land instead of land being a commodity. When land is a commodity then most people remain functionally landless, paying rent or a mortgage, and thus selling labor on desperation to not go homeless, which keeps the supply of labor sellers always saturated, which keeps wages low down near subsistence, which makes this an endless cycle. That is capitalism’s operational dynamic. That is its feedback loop. Even hundred-millionaires are quite unnecessary.
How about a change in corporate taxes that says employees who have wealth less $100,000 they must equally be given stock so that those employees own 25% of the corporation but if less than 25 % is owned by those employees then the corporate tax is 90% ?
Hi Bill, too wonky, and treats "employees" not people in general and doesn't get to the root of things, and requires formality of all commerce that it would affect (formal companies, formalized numbers of employees, etc)---- just so weirdly wonky.... you have a PhD in stochastic information that enables people to detect and fix failures in systems? Do you see the big picture of what I am saying about how capitailism disempowers most people? Do you know the shape of the wealth distribution plot (a hyperbola) and why it is that way? I ask you to go to the root level.
I see how capitalism compensates owners and screws employees and I know the wealth distribution and how the wealthy and corporations since 1971 have worked to steal wealth from 95% of Americans and transfer it the billionaire oligarchs - the top 0.01 %. My real proposal is to raise taxes on the wealthy and corporations to what they were in 1965 and also create a wealth tax. But that requires Democrats to win in 2028. Capitalism also needs to regulated with laws like antitrust and better protections for unions. To get elected Democrats need solutions to affordability including housing energy food and healthcare. And Democrats need to enforce the law against insurrection and prosecute convict and imprison Trump Republicans in Congress six justices on the Supreme Court and billionaire oligarchs. In Europe workers share corporate ownership through employee share plans workers cooperatives and co-determination boards.
"Capitalism also needs to regulated with laws like antitrust and better protections for unions."
The problem with antitrust laws is that they're far too slow and far too uncertain.
Competition is good; monopoly or oligopoly is bad. They should be opposed for their own sake, to maintain a 'market of many buyers and many sellers.'
The goal is to maintain competition in each area of commerce, in the face of business math that favors consolidation (which also allows monopoly pricing and monopsony wages for additional gains from consolidation.) IMO, the way to do this is graduated taxes on GROSS corporate income so that mergers would REDUCE profits and competitiveness.
Gross corporate income should not be the only criteria though. Similarly, media consolidation endangers democracy. Taxing gross media income at the % of market share of each media company would make consolidation uneconomical.
The idea is to prevent the emergence of a media monopoly, which the US is approaching.
Along with wealth taxes, a 1/2% transaction tax on all financial instruments, payments, and loans would raise substantial funds, while also reducing the EXTREME volatility and excessive computer-generated trading we see in stock exchanges.
We could reverse the regressive nature of this by a minimal per person national dividend income.
The problem is that most of this wealth is in stocks whose value fluctuates wildly. So it would be difficult to implement a 100 percent marginal tax rate on wealth (which is what this is proposing, assuming it is serious and not just wanking). Zucman's proposal is far more realistic, and no need to give anyone a trophy.
I like Dean Baker's idea of, instead of taxing corporate profits, the government gets non-voting shares in the equivalent amount. That way, the government gets the revenue when the company does well, and it's impossible to avoid (by, say, declaring the profits were all made overseas in places like Ireland). And since they are non-voting shares, the government has no control. Unlike today where the Trump keeps all the money from the golden shares and tells the company what to do.
Stock prices can fluctuate strongly. Real estate prices less so. But property taxes are something American home and business owners are long used to paying. Same with sales taxes, gasoline taxes.
The billionaire argument that you can't tax equities because their price fluctuates is a ludicrous dodge at best.
Yes, but I was arguing against a 100 percent tax, which is what the original comment was referencing. We don't tax houses at 100 percent. There is no reason not to instantiate a wealth tax in my opinion.
Exactly how and how much to tax billionaire wealth is above my pay grade. Too much, and capital flight will ensue. Too little, and it could cost more to implement than revenue generated.
It's good that at least it's a topic being discussed.
Under that system, can a man still have desire to innovate a new product? Do you think Ford could have invented Model T if he is told there is a limit he can keep his earnings?
Why would people who just want to be $1 ahead of others as if life is a competition, be the best innovators anyway? I think people motivated by love and wanting people to do well and have a better world would be better innovators for better goals.
Regarding the California wealth tax, "the billionaires are spending tens of millions, hundreds of millions already, to stoke fears and try to defeat the proposition on the ballot." They could just spend those hundreds of millions on the tax itself. However, their poor little egos can't stand the idea that they will have to contribute to the general welfare just like everyone else.
If it passes, the California wealth tax will be maximally democratic. It will be imposed by a voter referendum, rather than just a legislative enactment.
It's always astounded me how the super rich will spend more to avoid their taxes than the actual amount of taxes they would have to pay. Because they don't want their hard [strikeout] stolen [/strikeout] earned wealth to help anyone, especially the poor.
It was disappointing that neither Krugman or Zucman mentioned Gavin Newsom's opposition to Prop 40. He does have an alternative tax plan but why not do both? After all the wealthy are the ones who have reaped the lion's share of the benefits from the numerous tax cuts enacted since the 1980s. Newsom's stance could come back to bite him in the 2028 primaries as this issue gains traction .
It's more accurate to say that it sends a message to the Democratic Party leadership to make wealth inequality a primary issue and fix it. The fact that it is already on the ballot does that to some extent.
Obviously, the best soliution is long-term legislation at the federal level. I don't like one off solutions or legislation by ballot initiative or state actions that need federal solutions. But don't be so quick to discount symbolic actions; history shows that popular movements often start with small symbolic actions.
Very encouraging. Thank you, Professor, for introducing me to the astonishing Mr Zucman. I would love to see him debate one of Trump's economic nimrods like Smilin' Kevin Hassett.
Zucman is amazing and of course is a prodigy of Thomas Piketty whose Capital in the 21st Century is an amazing work, Nobel-worthy to say the least. Zucman calculated the graph that shows that the US basically has a flat tax now, if you include sales and property and wage and all taxes, not just income tax.
It seems to me the U.S. invented democratic socialism under FDR, which created a relatively affluent middle class that lasted until Reagan sold the world voodoo, trickle down economics, and we returned to a gilded age with a heavy layer of additional gilding.
It's not really democratic socialism so much as social democracy. I realize that sounds like mere semantical nitpicking, but there is actually a difference, albeit a narrow one.
I have yet to know a poor man who has nostalgia for poverty, or who finds freedom in it. I found poverty neither attractive nor edifying. It taught me nothing but a distortion of values, an over-rating of the virtues and graces of the rich and the so-called better classes. Charlie Chaplin
Money makes almost 100% of people evil or stupid. Evil like the men Zucman and Krugman describe. Evil like the men who crashed our economy in 2008. Evil like men who defend such men and bail them out. Stupid if we use their services. We all need to stop being evil or stupid for money. Story below from a friend.
The woman they hired to catch fraud caught the biggest fraud in America. So they fired her.
Her name is Eileen Foster. And what they did to her should make you angry.
Foster hunted fraud for a living. Twenty-five years. She was good at it.
Then she landed the big job. Head of fraud investigations at Countrywide. The largest home loan company in America. She had thirty to forty investigators under her. She reported to regulators. To the board.
She thought she was protecting the company. She had no idea what she was about to find.
2007. A call came in on her fraud hotline. A fired worker in Boston. He said there was massive fraud in the branches. Going on for years. Nobody ever did a thing.
Foster dug in. What she found was sickening.
Employees were forging borrowers' signatures. Faking incomes. Making broke people look rich. Doctoring documents. Tricking the computer systems.
Why? To push through loans that should never have been approved. To people who could never pay them back.
Every bad loan meant a fat commission. The salesmen got rich. The borrowers got buried.
She shut down six branches in Boston. Fired around forty-four people. She thought she was cleaning house.
Then it got worse. She found the same fraud everywhere. Miami. Chicago. Las Vegas. Los Angeles. City after city.
It was not a few bad apples. It was the whole orchard.
And then she found the most disturbing thing of all.
The company had a hotline for honest workers to report fraud. But it was a trap. When workers reported, they were not protected. They were tipped-off on, demoted, harassed, fired. The wrongdoers got warned. The whistleblowers got crushed. Rigged to protect the salesmen making the most money.
Foster gathered the evidence. Mountains of it. She reported it up the chain.
That is when she became the target.
Instead of fixing the fraud, the company came after her. Her job. Her name. They twisted her statements. Cooked up phony findings about her.
Bank of America was buying Countrywide by then. They had their own reasons to want her quiet. She knew too much.
September 2008. They fired her.
They slid a document across her desk. A gag order. And around 228,000 dollars to disappear.
All she had to do was sign. Take the cash. Vanish.
She said no.
She filed a complaint. She took on Bank of America. One of the most powerful banks on Earth. Of 1,500 whistleblowers like her, only 21 had ever won. She knew the odds and went anyway.
September 2011. The government ruled in her favor. It found Bank of America had illegally fired her for blowing the whistle. It ordered them to take her back and pay her 930,000 dollars. A regulator said the bank had used illegal tactics against her, and that she had shown great courage.
She threw the hush money back in their faces. Then she beat them for four times as much.
Her story went national. 60 Minutes put her on television. And a stunning fact came out.
She had run fraud investigations at the company at the very heart of the crisis. And the Justice Department had never even called her. Never once asked what she knew.
Now here is the part that should keep you up at night.
The fraud she exposed helped crash the entire economy. Millions of families lost their homes. Their savings. Everything.
And the men who built the machine? Take Angelo Mozilo, the tanned, silver-haired CEO who ran Countrywide. He paid a 67.5 million dollar settlement to the SEC. He was never criminally charged. He never spent a single day in prison. He kept his fortune and died a free, wealthy man in 2023.
The banks paid huge fines. The men who ran them walked away rich. And free.
Foster proved the fraud was real. She proved it came from the top. And still, not one of them saw a jail cell.
She was the fraud cop. When she caught the biggest fraud of all, they tried to bury her for it. She refused to be buried. She kept her name. Kept her voice. Became a hero for whistleblowers everywhere. And she is still standing today, still fighting for the people brave enough to tell the truth.
The bankers who broke millions of families never spent one day in jail. They are betting you will just forget.
So do not give them that. Drop a word below for the woman who refused the hush money and told the truth anyway. Share her story so the men who got away with it never get the silence they paid for.
I think we need our wealthiest people to be invested in the general health of the economy, with the same level of insecurity (or ideally security)that we all experience. Wealth taxes seem like a good way to do this. Wealth should also tax inheritances as straight income, maybe with a small exemption.
Mauss’s little book The Gift describes some relevant ideas going back to the ancient ideas of hospitality and honor and different kinds of exchanges—those where you give more than you get or get more than you give or get equal to what you give …today we can’t depend on honor to motivate billionaires to give more equal to what they take from society but have to use tax policy to remedy the hoarding issues so many not all (didn’t Warren Buffet and some other billionaires sign an agreement to give back some of their wealth like the basketball players I think LeBron is one who give back to their communities)of the billionaires seem to have…how much money could anyone need or want…is it to be safe they hoard? Why? What for? when
people are going hungry and dying for lack of healthcare around the world
Wow. These comparisons stun me in much the same way I imagine a bolt of lightning would do. But I'm glad someone is working back around to the astronomical sum the Heritage Foundation spent writing Project 2025--one estimate I read from a decent mainstream source estimated the total could reach a billion. That's nuts. But after watching Trump's early moves go so smoothly for so long, the sputtering of the plan's brainpower got louder and louder as the "new prosecutors" reached real courtrooms.
Fervent thanks to Paul for bringing Gabriel Zucman on to his substack to explore the implications of his research and suggest remedies to our current societal problems - namely, the ever increasing bloat in gazillionaire wealth and its negative effect on representative democracy. Zucman gives a powerful dissection of the implication of California’s proposed one-time billionaire tax on wealth (Prop 40) and predicts that its passage will provide a model for effective taxation of total wealth, rather than income, of billionaires. Passage and successful implementation of Prop 40 can set a tempting example - given the political will - for the U.S. and Europe to do likewise. He’s taught us once again that the power to tax is the power to shape society. We have a tax structure which allowed Jeff Bezos to claim the child tax credit! Something is surely rotten here and needs fixing!
OMG. It took me more than a half hour to get all the way through the transcript of this. But I plan to keep it on file because it was so chock full of info and ammo for the fight. My favorite T-shirt says TAX THE RICH. Who knew there were so many caveats? Ha. I was especially taken by two areas of interest, first the problems that even functioning social democracies are having fighting the international cabal of selfish bastards in the upper echelons of the oligarchy. I mean, Jeez Louise. So for us, here, it's even more of an uphill battle than I thought. The other was the stepwise nature of progress toward justice and equity in financial policies--how long reform takes and the sustained effort it takes to achieve this--which is especially teeth-grinding when you consider how much easier it seems to be to enact regressive policies, and even to undo progress made during eras when good government was in place. I hate cold showers, but sometimes you need something to wake you up. Thanks, I think. We need to elect representatives at all levels of government who are aware of all this and are committed to move forward via each and every power available to them.
We do our best but are foiled by the votes of 60% of white voters (including 70% of the white working class and 80% of white evangelicals). They are the culprits. Trump is just a consequence of their misdeeds.
Yep. And we must try to persuade at the very least the persuadable among them. Many are the victims of identity politics and groupthink promulgated by extremely bad actors who don't have their best interests at heart. Not that this exonerates them from responsibility for themselves, but we are all somewhat subject to a barrage of misinformation. When misinformation is attached to pre-existing anxieties and mixed in with xenophobia and racism, sexism, etc., you get a combustible compound that, if ignited ,will blow a lot of things up, including some decent things. So I mostly think we must aim higher than hating the 'little people,' although I admit being triggered by them sometimes. We will be most effective if we can manage, by ourselves and/or by attracting new allies, to chop off the head of the Greed Monster at election time, and via such public protests as boycotts and demonstrations. Call me crazy, but I think it's attainable. One other thing to consider is the majority of the population who, to date, have not even bothered to vote. Can we use outreach to somehow convince them to exercise what power they have?
I think it’s attainable, too. Just barely. But I think trying to convert Trump Voters is an inefficient way to get it done. In the hundreds of hours it takes to maybe convert a few Trump voters, an activist can get dozens of D voters, old and new, to the polls
Oh, PS. when Obama was running for the first time I lived in the far, far exurbs of Washington, DC in a little town in the Eastern Panhandle of WV. That's where I canvassed for him, door to door. Most of the people I spoke with seemed glad to have a convo with me. One sicced his dog on me, but it was so small that it only got its teeth caught on the cuff of my jeans. Which made both me and the guy guffaw. Who knows if this convinced him that libs are people too?
Point taken. I guess we have to live it to the pros to do most of the outreach, but I plan to knock on a few doors once the pros start organizing the action around here. And there's always yard signs and flags, which Alexandria Octasio recommends as remarkably convincing to the groupthink types. And my curated collection of political t-shirts and sweatshirts. Ha ha ha.
Knock on doors by all means! Thank you for your service. The pros say that’s the most effective way to get out the vote. The pros need an army of volunteers to get that done. Yard signs, too, yes! Sometimes people who answer the door-knock ask for them.
Your conversation is important. Reflect, however, on two matters:
1. Wealth is “net worth” and only “net income” (including unreported income like accumulated growth of unrealized and unreported capital gains due to inflation of asset valuations) increases net worth. All such increases are “incomes” that, by action of Congress are available as taxable under the 16th Amdt. We should thank Taft for that. So, all wealth is “available” to meet whatever Congress determines to be necessary as government expenditures and to repay accumulated debt. So, your actual debate is all about politics, not economics. It is the economic consequences of current policies (that you describe) that should ultimately drive the policy decision of what to tax. In 1942, income taxes were raised (at the high margin) above 80% and, by the 1950s we had overcome the concentrations of the Gilded Age that contributed to causes of the Great Depression.
2. We know today’s wealth concentration among our current population, but we all face death and we need therefore to consider appropriate estate and gift taxation as a means for allocating assets representing previously untaxed income accumulations that have not been addressed to adjust future allocations. Again, it is the economic consequences you explain that need, over time, to drive the political solutions that address those consequences.
Yes! Per Zucman: “But then you look at the data and you realize that in those decades after World War II, GDP growth was higher, in fact, than it’s been since the 1980s. Investment rates were no lower; in fact, they were higher.” Uncle Miltie’s fantasies bite the dust (again!) in the light of observed facts.
There is a repeated concern about wealth taxes driving the 1/10,000 out of the country. As Zucman states if they move to Switzerland (or some other country) they still have to pay taxes as long as they remain citizens. If they become citizens of Switzerland there is a great benefit to the United States in that they would no longer be able to give money to political candidates and thus loose much of their influence.
But as is presently true of income tax, annual wealth taxes could be citizenship- based regardless of where one resides. Then if they want to revoke their U.S. citizenship, good riddance.
Excellent point, Milton. Clearly, the level of influence these individuals are exerting in the political process is really a much greater concern than the loss of revenue.
If you leave the USA there’s an exit tax. Wondering how they would try to avoid that!
The elephant in the room is imperialism and offshoring. Krugman asks whether we could return to the post-WW2 recipe that seemed to work for a few decades, but it's a totally different economy now. The US kept most of the world poor by actions like the 1954 CIA coup against Guatemala to stop them from doing land reform to keep wages on a dirt floor. Fruit of the Loom could then relocate from Ohio to Guatemala to make underwear using $0.25/hour labor instead of $6/hour labor and those union jobs from Ohio are gone forever. Rinse, repeat with every industry that is not nailed down like carpentry that can't be offshored, but carpenters also get paid less because wages move as a field effect, of course.
Zucman was so close to sayng it here: ""So, for instance, changes in factor shares—labor and capital shares—have been partly affected by the decline in union power. When unions are stronger, you tend to get a bigger labor share. When unions are weaker, you get a bigger capital share. Also in the way that we organize international economic relations, globalization.""
He does touch on the need for international organization, which is to say "Workers of the world unite!" because ultimately that is what we the people need in order to become from from the global class servitude called capitalism. It hurts the people of the world immensely and also rots the imperial core, where the wealth Gini is up to 0.83 now. That's an astronomical number. Look up a recent US wealth distribution plot to see how obscene it looks. We the people need to take back ownership of the Earth from the oligarchs.
Many people who thought they were immune from the need to be in a union (e.g., highly-educated white-collar professionals) are learning that their corporate employers are now throwing them aside for AI cost savings of technology which doesn't get paid salaries, bonuses, sick leave, vacation, or 401k contributions.
I used to work in risk management in financial services. In just the past 9 to 12 months, I see numerous colleagues who made $175k - $275k per year have been laid off in favor of AI. One told me she felt lucky to find a much lower-level replacement position paying $120k so she and her husband in their early 60s with some medical problems, can make it to Medicare age.
Ironically, however, it’s people who really need unions that delivered the Trump catastrophe. Roughly 70% of the white working class voted for Trump. In 1980 the same people put Reagan in office. Why? The Southern Strategy of Nixon/Atwater worked. It still works. If “only” 60% of white working class voters had voted for Trump, we’d have a Democrat in the White House and probably control the legislature, too. The white working class doesn’t get all the blame, but it could not have been done without them.
The Republican Party has learned to leverage cultural issues to expand its voter base. People will vote against their economic self-interest if you appeal to some hot-button issue like racism, Christian fundamentalism, or white nationalism. If you appeal to a sense of victimhood and then give them someone to fear or hate for their victimization, you have the magic formula.
Or as LBJ is supposed to have said: "If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you."
Indeed! To a first order approximation, everything in in US politics can be explained by that observation.
Yes, and the Democrats use the same tactic but on the other side, the Good Cop to the Bad Cop.
Expand upon that thought. I hear that frequently, but to me there seems to be a fundamental difference.
I mean that the Republicans tend to be the "mean" ones, the ones who want to never increase (or even eliminate) the minimum wage, to get rid of housing assistance and rent control, to get rid of SNAP benefits, and anything else progressive, and Democrats are the ones who pretend to fight *for* them --- meanwhile never getting to the very root of the economic issues, because of course capitalism is the sacred cow or to use another large fauna metaphor, the elephant in the room that is hardly spoken about.
What passes as "politics" in the US imperium is all distraction from the main issues, while the false narratives fly fast and loose and keep the people churning on side issues and details and lies so the capitalists remain in power. It's so much. Just now I was looking at the lie that Daniel Ortega said there would be no more elections in Nicaragua, and it's all over all the media from LA Times to Democracy Now! --- blatant lies, as blatant as the claims that Iran killed tens of thousands of people in January. Trump said in his speech the number 45,000. Just a blatant lie.
Thanks for asking.
From ~1975-2023, about $79 trillion was transferred from the US bottom 90% =>top 1%.
Those ppl may not KNOW about this, but they know their lives are worse than their parents, and white workers without college degrees made no progress, while they saw Dems favoring minorities and women, who DID progress, (tho minorities and women are still not as well off as white men.) This kicked off an epidemic of 'Deaths of Despair' (Drug OD, Alcohol, suicide), decreased life expectancy, a lot of anger, and fertile ground for the Tea Party/MAGA.
http://tinyurl.com/NYT2020DeathsOfDespair (Free link)
In 2016 & 2024, there was a huge number of voters who wanted CHANGE, and Corporate Dems offered mostly 'more of the same.' It was easy to stir up racism and sexism in favor of a candidate who would change things.
White working-class voters would have to be stupid to believe a union buster like Reagan would help them rise out of their declining economic circumstances. I doubt that they are stupid. I expect the distribution of intelligence in their cohort is about the same as in any other large cohort. No, the 70% of them who voted for Reagan (and for every other subsequent Republican candidate for president except in 1992 when Perot syphoned off some R votes) did so to improve their lives in another dimension: to make sure government benefits were distributed to them and not “welfare queens” (a code name for you know what). Your comment acknowledges this parenthetically, and it’s true the Democrats have not offered to govern in ways that improve white lives but not the lives of others. They have offered to govern in ways that raise the distribution of income and wealth to the working class generally, but that, without the racial discrimination component, isn’t what 70% of the white working class wants.
I guess my response is "Yes, AND..."
No question Big Money has harnessed White racism to elect Republicans, and Trump turned that up to 11.
But they've ALSO compromised Democrats with Big Money, so "Tax the Rich!!" Democrats get torpedoed, if necessary by coopting Black leaders (Clyburn in 2020) to elect Corporate DNC dems (even though Biden governed as a closet progressive.)
More than one thing can be true.
The white working class has been screwed by Republicans, but Dems sometimes REDUCED, but didn't REVERSE the tax giveaways to the rich and aren't full throated about reversing them. They'd rather fiddle around the edges with 'Affordability' than return ~$150,000/per person and $32k per year to workers.
https://economictimes.indiatimes.com/magazines/panache/american-dream-or-nightmare-us-top-1-siphoned-79-trillion-from-bottom-90-over-five-decades-research-reveals/articleshow/119903309.cms
Voters give both parties about EQUAL credit for economic plans.
https://www.pewresearch.org/politics/2025/10/30/how-americans-see-the-parties-on-key-issues/
The Dem's "Tax the Rich, sort of" policy is REALLY weak tea, offering to raise taxes a little on billionaire income, not wealth, merely slowing, not reversing the ongoing 90%=>1% steal.
"Democrats will make billionaires pay a minimum
income tax rate of 25 percent, raising $500 billion in 10 years".
https://democrats.org/wp-content/uploads/2025/07/2024-Democratic-Party-Platform.pdf
"U.S. billionaires added roughly $1.5 trillion to their collective wealth in 2025," https://finance.yahoo.com/markets/stocks/articles/us-billionaires-grew-1-5-155500595.html
Trump, stealing from the Left, often touched the truth when he spoke about the economy and those remarks helped defeat Clinton & Harrris and got him elected. He stole from Warren and said the “economy was a rigged system,” referred to himself as, “a nominee from outside the rigged and corrupt system,” and that, “we will eliminate the Carried Interest Deduction and other special interest loopholes that have been so good for Wall Street investors, and people like me, but unfair to American workers.”
He claimed, “This election will decide whether we're ruled by a corrupt political class or whether we are ruled by yourselves, the people. It is time to reject a failed political elite that has bled this country dry.”
All lies of course, but when the choice is between someone who says "hey, everything is fine, I'll make no changes" and someone who promises to wrench the wheel away from the rich and corrupt...well, the 20% of voters who don't know who their Senators are will fall for it.
Thanks for this rational and nuanced analysis. Democrats have not been hardnosed enough (or single-minded enough) about taxing the rich. I think this might sell with working class people, and it’s time to go all in, as AOC has done. I hope more people like her will be elected in November. That could turn things around. I think bigotry has been the deciding factor since 1968, but going all in on tax the rich might make a dent in that.
Lucky lady !
When I was laid off at 51 yrs old - I got one month’s severance pay ( and a gag order not to discuss the “ deal “ with other employees )
this came 32 days short of being fully vested in the company retirement plan .
AI will make company layoffs to “ restructure”
so much easier - less red tape for HR - unless
HR itself is terminated .
While we're at it, let's not forget the welfare work rules, which only serve to help further prostitute the job market, "hold the line on upward salary pressures", and punish people for being poor.
and the Constitutional provision that allows prisoners to be farmed out as if they are slaves
Yes, capitalists have tried to capture and santiize the arts and pretend there's a non-political realm called "art" and tried to demote powerful political art as merely "propaganda" or "social realism".
A couple years ago I listened to The Grapes of Wrath at the age of 50 with my stepson while driving him to his sports practices. We would listen in the car and it was so very powerful. Steinbeck created such a powerful work of art that shows how capitalism hurts real people and how the system effect of land control is the mechanism.
People are still creating such things but of course capitalists control most of the institutions like universities and the publishing houses and the art world for the most part and they exert influence which is obvious. But weeds grow in the cracks of the sidewalk.
Taxing everything above a billion, now that's a wealth tax! I like especially getting to have a dog park named after you. It preserves the best aspects of capitalism, while eliminating the excesses.
250 years ago, at the time Wealth of Nations was written, England had a wealth tax: people were taxed on the amount of land they owned and on the numbers of windows in their houses (which are easy to count from the outside). Adam Smith suggested a progressive income tax: “It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.”
As Zucman points out, if you do what every Republican president has done since 1980, and cut the income tax on corporations the stock goes up and investors increase their wealth without taxation. So, another possibility is to tax unrealized assets.
That had the unfortunate market distortion of reducing the number of windows people had on their houses, and hurt people’s health. Similar to the tax in France on the ground footprint of houses, which led to many houses with cantilevered overhangs.
I didn't say it was a good tax, only that they had wealth taxes in England 250 years ago, so it is not exactly a new concept. Incidentally, in Chelsea and some other parts of London you can still see elegant Georgian terraces with some houses still having bricked-up windows.
I was so pleased that Zucman is fairly confident of wealth taxes in the US in the near future. Let's hope he's right. Piketty was more doubtful 10 years ago.
The Mansard roof added an additional floor because the slanted roof defined an attic.
Yes, that's another detail of the intersection of carpentry and economic policy! This stuff is fascinating and makes a perfect metaphor for Krugman's discussion with Zucman about wealth tax evasion!
I understand the point of that saying, but I prefer a more integrated holistic solution that does not lead to obscene unearned wealth accumulation to begin with. I think we need a right to land instead of land being a commodity. When land is a commodity then most people remain functionally landless, paying rent or a mortgage, and thus selling labor on desperation to not go homeless, which keeps the supply of labor sellers always saturated, which keeps wages low down near subsistence, which makes this an endless cycle. That is capitalism’s operational dynamic. That is its feedback loop. Even hundred-millionaires are quite unnecessary.
Sage
How about a change in corporate taxes that says employees who have wealth less $100,000 they must equally be given stock so that those employees own 25% of the corporation but if less than 25 % is owned by those employees then the corporate tax is 90% ?
Hi Bill, too wonky, and treats "employees" not people in general and doesn't get to the root of things, and requires formality of all commerce that it would affect (formal companies, formalized numbers of employees, etc)---- just so weirdly wonky.... you have a PhD in stochastic information that enables people to detect and fix failures in systems? Do you see the big picture of what I am saying about how capitailism disempowers most people? Do you know the shape of the wealth distribution plot (a hyperbola) and why it is that way? I ask you to go to the root level.
Sage
I see how capitalism compensates owners and screws employees and I know the wealth distribution and how the wealthy and corporations since 1971 have worked to steal wealth from 95% of Americans and transfer it the billionaire oligarchs - the top 0.01 %. My real proposal is to raise taxes on the wealthy and corporations to what they were in 1965 and also create a wealth tax. But that requires Democrats to win in 2028. Capitalism also needs to regulated with laws like antitrust and better protections for unions. To get elected Democrats need solutions to affordability including housing energy food and healthcare. And Democrats need to enforce the law against insurrection and prosecute convict and imprison Trump Republicans in Congress six justices on the Supreme Court and billionaire oligarchs. In Europe workers share corporate ownership through employee share plans workers cooperatives and co-determination boards.
"Capitalism also needs to regulated with laws like antitrust and better protections for unions."
The problem with antitrust laws is that they're far too slow and far too uncertain.
Competition is good; monopoly or oligopoly is bad. They should be opposed for their own sake, to maintain a 'market of many buyers and many sellers.'
The goal is to maintain competition in each area of commerce, in the face of business math that favors consolidation (which also allows monopoly pricing and monopsony wages for additional gains from consolidation.) IMO, the way to do this is graduated taxes on GROSS corporate income so that mergers would REDUCE profits and competitiveness.
Gross corporate income should not be the only criteria though. Similarly, media consolidation endangers democracy. Taxing gross media income at the % of market share of each media company would make consolidation uneconomical.
The idea is to prevent the emergence of a media monopoly, which the US is approaching.
Along with wealth taxes, a 1/2% transaction tax on all financial instruments, payments, and loans would raise substantial funds, while also reducing the EXTREME volatility and excessive computer-generated trading we see in stock exchanges.
We could reverse the regressive nature of this by a minimal per person national dividend income.
The problem is that most of this wealth is in stocks whose value fluctuates wildly. So it would be difficult to implement a 100 percent marginal tax rate on wealth (which is what this is proposing, assuming it is serious and not just wanking). Zucman's proposal is far more realistic, and no need to give anyone a trophy.
I like Dean Baker's idea of, instead of taxing corporate profits, the government gets non-voting shares in the equivalent amount. That way, the government gets the revenue when the company does well, and it's impossible to avoid (by, say, declaring the profits were all made overseas in places like Ireland). And since they are non-voting shares, the government has no control. Unlike today where the Trump keeps all the money from the golden shares and tells the company what to do.
Stock prices can fluctuate strongly. Real estate prices less so. But property taxes are something American home and business owners are long used to paying. Same with sales taxes, gasoline taxes.
The billionaire argument that you can't tax equities because their price fluctuates is a ludicrous dodge at best.
Yes, but I was arguing against a 100 percent tax, which is what the original comment was referencing. We don't tax houses at 100 percent. There is no reason not to instantiate a wealth tax in my opinion.
Exactly how and how much to tax billionaire wealth is above my pay grade. Too much, and capital flight will ensue. Too little, and it could cost more to implement than revenue generated.
It's good that at least it's a topic being discussed.
Under that system, can a man still have desire to innovate a new product? Do you think Ford could have invented Model T if he is told there is a limit he can keep his earnings?
Sure, the big wealth taxes should start at $10-50 million, which is a lot more wealth than a startup entrepreneur has!
Why would people who just want to be $1 ahead of others as if life is a competition, be the best innovators anyway? I think people motivated by love and wanting people to do well and have a better world would be better innovators for better goals.
Regarding the California wealth tax, "the billionaires are spending tens of millions, hundreds of millions already, to stoke fears and try to defeat the proposition on the ballot." They could just spend those hundreds of millions on the tax itself. However, their poor little egos can't stand the idea that they will have to contribute to the general welfare just like everyone else.
If it passes, the California wealth tax will be maximally democratic. It will be imposed by a voter referendum, rather than just a legislative enactment.
💯%🎯
It's always astounded me how the super rich will spend more to avoid their taxes than the actual amount of taxes they would have to pay. Because they don't want their hard [strikeout] stolen [/strikeout] earned wealth to help anyone, especially the poor.
It's "communism" when you're taxed on the money you inherited! Fellow trust fund babies, to the breach! Turn back the red hordes!
It was disappointing that neither Krugman or Zucman mentioned Gavin Newsom's opposition to Prop 40. He does have an alternative tax plan but why not do both? After all the wealthy are the ones who have reaped the lion's share of the benefits from the numerous tax cuts enacted since the 1980s. Newsom's stance could come back to bite him in the 2028 primaries as this issue gains traction .
A serious unified proposal would be interesting.
IMO, a fatal error. Newsom outed himself as a Corporate Fat Cat Dem by opposing the billionaire tax.
It is a one year tax.
It does absolutely nothing about the long term issues, so all the claims in favor of the tax are lies.
It's true it is not a long term solution. But it is a bellweather and a warning shot to billionaires which can leaad to a longer term solution.
A warning shot about what?
Think this through.
What will they decide to do or not do because of this.
It's more accurate to say that it sends a message to the Democratic Party leadership to make wealth inequality a primary issue and fix it. The fact that it is already on the ballot does that to some extent.
Get a grip.
Make a permanent plan, write a proposition, get it on the ballot. Have the good fight.
Sending a message is for high school.
Think about it. There is a reason it is only about one year.
Obviously, the best soliution is long-term legislation at the federal level. I don't like one off solutions or legislation by ballot initiative or state actions that need federal solutions. But don't be so quick to discount symbolic actions; history shows that popular movements often start with small symbolic actions.
Very encouraging. Thank you, Professor, for introducing me to the astonishing Mr Zucman. I would love to see him debate one of Trump's economic nimrods like Smilin' Kevin Hassett.
Zucman is amazing and of course is a prodigy of Thomas Piketty whose Capital in the 21st Century is an amazing work, Nobel-worthy to say the least. Zucman calculated the graph that shows that the US basically has a flat tax now, if you include sales and property and wage and all taxes, not just income tax.
Hassett would merely lie and smirk, as usual.🤬
See Rest is Politics, Zucman and Stewart. And read the comments!
It seems to me the U.S. invented democratic socialism under FDR, which created a relatively affluent middle class that lasted until Reagan sold the world voodoo, trickle down economics, and we returned to a gilded age with a heavy layer of additional gilding.
It's not really democratic socialism so much as social democracy. I realize that sounds like mere semantical nitpicking, but there is actually a difference, albeit a narrow one.
Hear, hear!!
So true. These gilded dolls need to relocate.
Q: How many voodoo pins does it take to make all the billionaires move-off this planet and leave their wealth behind?
A: One: the Golden Pin stuck in grey matter that bridges their sclerotic compassion and empathy centers.
Three questions for the 20+ families at the top of the wealth spectrum:
1. How much money do you really NEED?
2. Why do you measure your value as a human being with the amount of your net worth?
3. Why do you NOT recognize that all of our lives are interconnected here on earth (do you have a hole in your soul)?
1. They have no limit.
2. Because they're otherwise empty inside. Devoid of humanity. They're mostly psychopaths.
3. They believe themselves to be superior. Not based on any reality, but on being psychopaths.
I have yet to know a poor man who has nostalgia for poverty, or who finds freedom in it. I found poverty neither attractive nor edifying. It taught me nothing but a distortion of values, an over-rating of the virtues and graces of the rich and the so-called better classes. Charlie Chaplin
To paraphrase the great Jesse Welles, “There’s a hole in my soul that’s just raging” (Join ICE)
Because what they want is control (and to avoid being controlled — laissez faire). As Noah Cross said in Chinatown, they want to own "the future".
Why does Evil, more often than not, increase in proportion to wealth
I can think of a few prominent exceptions:
Warren Buffet
Mackenzie Bezos
Money makes almost 100% of people evil or stupid. Evil like the men Zucman and Krugman describe. Evil like the men who crashed our economy in 2008. Evil like men who defend such men and bail them out. Stupid if we use their services. We all need to stop being evil or stupid for money. Story below from a friend.
The woman they hired to catch fraud caught the biggest fraud in America. So they fired her.
Her name is Eileen Foster. And what they did to her should make you angry.
Foster hunted fraud for a living. Twenty-five years. She was good at it.
Then she landed the big job. Head of fraud investigations at Countrywide. The largest home loan company in America. She had thirty to forty investigators under her. She reported to regulators. To the board.
She thought she was protecting the company. She had no idea what she was about to find.
2007. A call came in on her fraud hotline. A fired worker in Boston. He said there was massive fraud in the branches. Going on for years. Nobody ever did a thing.
Foster dug in. What she found was sickening.
Employees were forging borrowers' signatures. Faking incomes. Making broke people look rich. Doctoring documents. Tricking the computer systems.
Why? To push through loans that should never have been approved. To people who could never pay them back.
Every bad loan meant a fat commission. The salesmen got rich. The borrowers got buried.
She shut down six branches in Boston. Fired around forty-four people. She thought she was cleaning house.
Then it got worse. She found the same fraud everywhere. Miami. Chicago. Las Vegas. Los Angeles. City after city.
It was not a few bad apples. It was the whole orchard.
And then she found the most disturbing thing of all.
The company had a hotline for honest workers to report fraud. But it was a trap. When workers reported, they were not protected. They were tipped-off on, demoted, harassed, fired. The wrongdoers got warned. The whistleblowers got crushed. Rigged to protect the salesmen making the most money.
Foster gathered the evidence. Mountains of it. She reported it up the chain.
That is when she became the target.
Instead of fixing the fraud, the company came after her. Her job. Her name. They twisted her statements. Cooked up phony findings about her.
Bank of America was buying Countrywide by then. They had their own reasons to want her quiet. She knew too much.
September 2008. They fired her.
They slid a document across her desk. A gag order. And around 228,000 dollars to disappear.
All she had to do was sign. Take the cash. Vanish.
She said no.
She filed a complaint. She took on Bank of America. One of the most powerful banks on Earth. Of 1,500 whistleblowers like her, only 21 had ever won. She knew the odds and went anyway.
September 2011. The government ruled in her favor. It found Bank of America had illegally fired her for blowing the whistle. It ordered them to take her back and pay her 930,000 dollars. A regulator said the bank had used illegal tactics against her, and that she had shown great courage.
She threw the hush money back in their faces. Then she beat them for four times as much.
Her story went national. 60 Minutes put her on television. And a stunning fact came out.
She had run fraud investigations at the company at the very heart of the crisis. And the Justice Department had never even called her. Never once asked what she knew.
Now here is the part that should keep you up at night.
The fraud she exposed helped crash the entire economy. Millions of families lost their homes. Their savings. Everything.
And the men who built the machine? Take Angelo Mozilo, the tanned, silver-haired CEO who ran Countrywide. He paid a 67.5 million dollar settlement to the SEC. He was never criminally charged. He never spent a single day in prison. He kept his fortune and died a free, wealthy man in 2023.
The banks paid huge fines. The men who ran them walked away rich. And free.
Foster proved the fraud was real. She proved it came from the top. And still, not one of them saw a jail cell.
She was the fraud cop. When she caught the biggest fraud of all, they tried to bury her for it. She refused to be buried. She kept her name. Kept her voice. Became a hero for whistleblowers everywhere. And she is still standing today, still fighting for the people brave enough to tell the truth.
The bankers who broke millions of families never spent one day in jail. They are betting you will just forget.
So do not give them that. Drop a word below for the woman who refused the hush money and told the truth anyway. Share her story so the men who got away with it never get the silence they paid for.
Wow. Thanks. Didn’t know about her.
https://en.wikipedia.org/wiki/Eileen_Foster
As a left-behind Afghan ally, all of your articles are truly appreciated. Thank you 🙏
Thank you both for this encouraging discussion. It offers more than a glimmer of hope.
I think we need our wealthiest people to be invested in the general health of the economy, with the same level of insecurity (or ideally security)that we all experience. Wealth taxes seem like a good way to do this. Wealth should also tax inheritances as straight income, maybe with a small exemption.
Amen, with a touch of R-E-S-P-E-C-T and R-E-S-P-O-N-S-I-B-I-L-I-T-Y!
Mauss’s little book The Gift describes some relevant ideas going back to the ancient ideas of hospitality and honor and different kinds of exchanges—those where you give more than you get or get more than you give or get equal to what you give …today we can’t depend on honor to motivate billionaires to give more equal to what they take from society but have to use tax policy to remedy the hoarding issues so many not all (didn’t Warren Buffet and some other billionaires sign an agreement to give back some of their wealth like the basketball players I think LeBron is one who give back to their communities)of the billionaires seem to have…how much money could anyone need or want…is it to be safe they hoard? Why? What for? when
people are going hungry and dying for lack of healthcare around the world
Chuck Feeney gave away his 8 billion while alive and said he hoped his last check would bounce
Wow. These comparisons stun me in much the same way I imagine a bolt of lightning would do. But I'm glad someone is working back around to the astronomical sum the Heritage Foundation spent writing Project 2025--one estimate I read from a decent mainstream source estimated the total could reach a billion. That's nuts. But after watching Trump's early moves go so smoothly for so long, the sputtering of the plan's brainpower got louder and louder as the "new prosecutors" reached real courtrooms.
Fervent thanks to Paul for bringing Gabriel Zucman on to his substack to explore the implications of his research and suggest remedies to our current societal problems - namely, the ever increasing bloat in gazillionaire wealth and its negative effect on representative democracy. Zucman gives a powerful dissection of the implication of California’s proposed one-time billionaire tax on wealth (Prop 40) and predicts that its passage will provide a model for effective taxation of total wealth, rather than income, of billionaires. Passage and successful implementation of Prop 40 can set a tempting example - given the political will - for the U.S. and Europe to do likewise. He’s taught us once again that the power to tax is the power to shape society. We have a tax structure which allowed Jeff Bezos to claim the child tax credit! Something is surely rotten here and needs fixing!
OMG. It took me more than a half hour to get all the way through the transcript of this. But I plan to keep it on file because it was so chock full of info and ammo for the fight. My favorite T-shirt says TAX THE RICH. Who knew there were so many caveats? Ha. I was especially taken by two areas of interest, first the problems that even functioning social democracies are having fighting the international cabal of selfish bastards in the upper echelons of the oligarchy. I mean, Jeez Louise. So for us, here, it's even more of an uphill battle than I thought. The other was the stepwise nature of progress toward justice and equity in financial policies--how long reform takes and the sustained effort it takes to achieve this--which is especially teeth-grinding when you consider how much easier it seems to be to enact regressive policies, and even to undo progress made during eras when good government was in place. I hate cold showers, but sometimes you need something to wake you up. Thanks, I think. We need to elect representatives at all levels of government who are aware of all this and are committed to move forward via each and every power available to them.
We do our best but are foiled by the votes of 60% of white voters (including 70% of the white working class and 80% of white evangelicals). They are the culprits. Trump is just a consequence of their misdeeds.
Yep. And we must try to persuade at the very least the persuadable among them. Many are the victims of identity politics and groupthink promulgated by extremely bad actors who don't have their best interests at heart. Not that this exonerates them from responsibility for themselves, but we are all somewhat subject to a barrage of misinformation. When misinformation is attached to pre-existing anxieties and mixed in with xenophobia and racism, sexism, etc., you get a combustible compound that, if ignited ,will blow a lot of things up, including some decent things. So I mostly think we must aim higher than hating the 'little people,' although I admit being triggered by them sometimes. We will be most effective if we can manage, by ourselves and/or by attracting new allies, to chop off the head of the Greed Monster at election time, and via such public protests as boycotts and demonstrations. Call me crazy, but I think it's attainable. One other thing to consider is the majority of the population who, to date, have not even bothered to vote. Can we use outreach to somehow convince them to exercise what power they have?
I think it’s attainable, too. Just barely. But I think trying to convert Trump Voters is an inefficient way to get it done. In the hundreds of hours it takes to maybe convert a few Trump voters, an activist can get dozens of D voters, old and new, to the polls
Oh, PS. when Obama was running for the first time I lived in the far, far exurbs of Washington, DC in a little town in the Eastern Panhandle of WV. That's where I canvassed for him, door to door. Most of the people I spoke with seemed glad to have a convo with me. One sicced his dog on me, but it was so small that it only got its teeth caught on the cuff of my jeans. Which made both me and the guy guffaw. Who knows if this convinced him that libs are people too?
Point taken. I guess we have to live it to the pros to do most of the outreach, but I plan to knock on a few doors once the pros start organizing the action around here. And there's always yard signs and flags, which Alexandria Octasio recommends as remarkably convincing to the groupthink types. And my curated collection of political t-shirts and sweatshirts. Ha ha ha.
Knock on doors by all means! Thank you for your service. The pros say that’s the most effective way to get out the vote. The pros need an army of volunteers to get that done. Yard signs, too, yes! Sometimes people who answer the door-knock ask for them.
Your conversation is important. Reflect, however, on two matters:
1. Wealth is “net worth” and only “net income” (including unreported income like accumulated growth of unrealized and unreported capital gains due to inflation of asset valuations) increases net worth. All such increases are “incomes” that, by action of Congress are available as taxable under the 16th Amdt. We should thank Taft for that. So, all wealth is “available” to meet whatever Congress determines to be necessary as government expenditures and to repay accumulated debt. So, your actual debate is all about politics, not economics. It is the economic consequences of current policies (that you describe) that should ultimately drive the policy decision of what to tax. In 1942, income taxes were raised (at the high margin) above 80% and, by the 1950s we had overcome the concentrations of the Gilded Age that contributed to causes of the Great Depression.
2. We know today’s wealth concentration among our current population, but we all face death and we need therefore to consider appropriate estate and gift taxation as a means for allocating assets representing previously untaxed income accumulations that have not been addressed to adjust future allocations. Again, it is the economic consequences you explain that need, over time, to drive the political solutions that address those consequences.
Great Interview, Paul Krugman. Thank You!
Yes! Per Zucman: “But then you look at the data and you realize that in those decades after World War II, GDP growth was higher, in fact, than it’s been since the 1980s. Investment rates were no lower; in fact, they were higher.” Uncle Miltie’s fantasies bite the dust (again!) in the light of observed facts.