Looking at the acrimonious economic debates between right and left, we can see that the entire framing about government vs. private enterprise is a pack of lies. What this argument is really about is over the distribution of a few percentage points of GDP. Think about it: 1) Minimum wage. Raising the minimum wage to $15/hr or $20/hr would simply mean that one or two percent more of the GDP would go to workers instead of shareholders. Much of that would return to shareholders as the minimum wage workers spent their new dollars on buying more products. 2) Income tax hikes for the wealthy. The bulk of taxes are paid by the middle class. Hiking rates on the wealthy would shift one or two percent of GDP away from the wealthy, to pay for programs like infrastructure, health and education for the poor and middle class, also reducing the budget deficit. Not the end of the world for the wealthy at all. 3) Food, welfare, unemployment assistance. This is probably the biggest bone of contention. The right maintains that its not about the money, its about work ethic. Yet they push endlessly for corporate tax breaks, which funnel more money to the already wealthy. Which supposedly doesnt affect *their* work ethic... Once again, even though they expend enormous energy fighting every benefit increase for the poor, the amounts in question are still in the low single digits of GDP. 4) Retirement programs i.e. Social Security. Most of the bluster on the right involving Social Security has to do with the idea that it will become insolvent in a few decades. But the wealthy dont contribute proportionally to this program. Because incomes over about $100k arent subject to Social Security taxes. We wouldnt even have to remove the cap to make the program solvent forever, just raise it slightly to account for demographic changes. This would only add a tax burden of a few percentage points to the very wealthy. Yet they scream like stuck pigs at any such proposals. 5) Wealth taxes. The middle class pays most of the property taxes, since they own the largest share of real property. Even though the wealthy have more expensive homes, most of their assets are financial in nature. So they avoid property taxes on the bulk of their total assets. We know that wealth generally grows at a rate of about 5% per year. So a wealth tax of one percent would generate enormous revenue, while only slightly reducing the *growth* of wealth to 4% per year. Yet this is treated as if it would be the end of capitalism. In summary all the whining about socialism is really about a few lousy percentage points of GDP, affecting possibly a few million of the wealthiest people worldwide. Slightly changing the split of profits could make an all-important difference in *billions of lives.* Yet somehow we cant manage to get past these stupid arguments. What a travesty.
Posted on: Tue, 09 Dec 2014 18:26:05 +0000
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