On Inequality, Democracy and Taxing the Rich – A Modest Proposal

No doubt many raised in our capitalist society, where inequality rules and excessive incomes and wealth are seen as a right (and where even the NDP only proposes a measly 1% tax on excessive wealth), will consider this proposal to be radical but it is actually quite a modest proposal.

So what is excessive income and wealth. There are many ways to measure that, many statistical, but I propose a simpler definition – the amount of wealth and income where increases have no discernible effect on ones way of life or standard of living, where the increase is simply not noticeable in one's day to day life. Let's be generous to the wealthy in determining such levels. I propose an annual income of $1 million dollars and total assets of $100 million as the level that triggers “excessive income and wealth”. Above that no one notices without reading their financial statements.

The thing about excessive wealth is that it makes minuscule difference to the recipients but could make all the world of difference to the poor and underprivileged and to society as a whole if used for the common good. I will not even attempt to list what all that excessive wealth could do if devoted to the common good of society .

But there is another side to excessive income and wealth – it is highly undemocratic. The rich do not cling to their excessive wealth because it makes a difference to their daily lives. They cling to it because it gives them economic and political power. It is not just a matter of economic inequality, is a matter of political inequality.

Democracy is based on equality, one person one vote. Economic power is political power. Excessive wealth skews political power so that the wealthy have more of it. Excessive wealth is inherently undemocratic.

So what do we do with this excessive wealth so that it benefits society. We tax it away so that it can be used for the common good.

This sounds radical at first. But what do the wealthy lose in this proposal. Their standard of living and quality of life does not change. They only thing they lose is their excessive economic and political power, power that undermines our democracy.

Postscript

In taxing away excessive wealth we cannot just require it's conversion to cash to be paid as taxes. That would obviously be very disruptive to the economic system. Society (through the government) will take ownership of these resources in kind and in many cases maintain them while applying revenues from them to the common good. In some cases they may need to change the policies of entities that are not acting in the public interest or divest ownership of entities where that serves the public interest.

Also this proposal does not address all the problems with our tax system. For it to be truly progressive we need to raise the income level that triggers the payment of taxes and increase the higher marginal tax rates, including adding marginal tax rates at higher income levels (between $200,000 and $1 million).

Sick and Comfortable

Do you ever have one of those days you feel so sick and miserable you just call in sick, spend the day in your warm bed in your nice warm house and just wait till you feel better. Whenever I feel like that I feel so thankful that I can do that. Most people in the world do not live in modern industrialized countries with so very comfortable living conditions and the ability to take time off work when they are sick. Most people live in much harsher living conditions than we do and have to continue with the drudgery of life no matter how sick they feel, unless of course their illness makes them physically unable to continue to function, in which case they usually end up in even worse poverty than their normal poor living conditions. Sometimes I am just thankful that I can be "sick and comfortable".

Blog Action Day for the Environment

Today is Blog Action Day for the Environment.

One can only wonder in amazement why there are still Global Warming doubters in light of the international scientific consensus and the recent recognition by the Nobel Committee that Global Warming is a threat to international peace and security.

The press would like to maker everyone think that there are two somewhat equal opposing scientific views here. But, just as in reality there is only one scientific position on whether the earth is flat, on whether gravity exists and whether we evolved or were created, there is really only one scientific position on the existence and the major cause of Global Warming - man.

One can only speculate as to what the doubters motives are because the ironic thing about fighting Global Warming is that, even if for some strange region the virtual consensus of the world’s climate scientists was wrong and the marginal fringe was right, fighting Global Warming would still be good for the environment and the economy.

The doubters are becoming increasingly marginalized, as groups such as the Canadian Council of Chief Executives and Canadian Association of Petroleum Producers support taking action on Global Warming.

Even capitalists are beginning to realize that without a planet there are no profits and that a waste-based economy is not sustainable in the long run.

There are profits to be made from increased development in the third world, but the planet simply cannot sustain development in the developing the world in the wasteful way it has been done in the developed world.

The developing world will have to develop differently than we have, and if we expect them to do that we have to change our habits and provide the technology to make that happen.

So what do we do to reduce the development gap in a sustainable way. The largest infrastructure factors are communications, transportation and housing.

In the communications area the developing countries are already skipping past the infrastructure heavy wired communications that we in the developed world grew up with and going straight to wireless technology (though wireless does have health concerns).

In transportation there is an opportunity for the developing world to avoid the North American reliance on the automobile by developing pedestrian and bicycle friendly cities and adopting a more European public transit focused approach to transportation.

In housing there is lots of room to make huge improvements in the quality of housing and water and sewage infrastructure without the excesses of North American society. Heating is the big energy eater in housing in the developed world. As most developing countries are in warm climates that is not a big factor. At least in the short term they may have to forgo the luxury of universal air conditioning.

As the developing world moves forward, we must also move forward. but in a different way than the past. The first thing we have to recognize that standard of living measured in the old fashioned economic way, how much we consume and waste per person, is not equivalent to quality of life. We can live much less extravagantly, particularly in terms of energy use, and increase our quality of life. Status, in terms of huge houses and automobiles that we do not need, will not buy us happiness.

North America can move towards less reliance on the automobile and more public transit, especially if we raise taxes on gasoline and put the funds into improved public transit. It has not destroyed European economies and it will not destroy North American economies.

In housing we can move from extravagance to comfort in our housing choices. The first thing we can do is remove the artificial tax incentives, such as capital gains tax exemptions on residences regardless of size or value, that encourage people to own bigger houses than they need.

As individuals we can start with our personal choices. Even simple things like changing light bulbs and buying energy efficient appliances, when done by increasingly large numbers of people can have a very significant cumulative effect. They also have an important indirect effect, because when we make these kinds of decisions we are also telling government and industry what our values and priorities are.

There are huge and sustainable profits to be made in developing sustainable products and technologies. Profits made from destroying the planet have an inevitable short future.

We are beginning to realize that we can change our way of living to a more sustainable one and increase our quality of life.

A green future is a long future.