Over at Bloomberg Peter Orszag recognizes that Thomas Piketty’s proposed global wealth tax has no legs whatever:
In the hoopla over whether Thomas Piketty’s data on growing global inequality are correct, an important question about how to address the problem has been obscured. Piketty describes his own global wealth tax idea as more of a “useful utopia†than a practical policy suggestion. Is there anything more plausible that can be done?
He proposes a couple of implausible taxes himself: a graduated consumption tax, a favorite among economists, and an inheritance (as opposed to estate) tax. You can get the details from the op-ed itself. The wind has been blowing against any form of tax on estates for decades and the only way Republicans could possibly support a consumption tax of any flavor would be would be as a replacement for the income tax, something Democrats would find completely unacceptable. This is part of our national impasse. One party or another opposes anything that would be more economically sound than the status quo for ideological or political reasons.
While we’re proposing implausible taxes, I’ll propose one, too: a graduated carbon tax. In essence, it would consist of a tax prebate on a sliding scale based on income combined with a very stiff tax on gas at the pump, jet fuel, boat fuel, and home energy use. There would be no additional tax on energy use by businesses.
My objectives for this would be geopolitical, avoiding the regressive and job-destroying character of other neoliberal proposals for reducing emissions, and, frankly, shutting people up.
I would favor any tax that finally taxes the breeders and their brood either directly or indirectly. A tax based on income is a poor vehicle, but a carbon tax or consumption taxes are OK in this regard.
As it is now, breeders are not only paying their way, but are enjoying a grand subsidy of their breeding in the form of public education, income tax deductions and even EITC. It used to be that we needed kids for farm-hands, but now you can’t find one who knows how to mow your lawn. All the while, they grow up dumb and promise to go on polluting the world, killing off species, and using up energy.
Piketty spends 700 pages identifying a problem and offers one solution he admits will never happen. James Galbraith completed a study of inequality in 2012 using payroll data and offered a slew of suggestion on how to effectively tackle inequality, but notice Democrats made no effort to jump on the bandwagon as they have with Piketty.
Probably because they know Piketty’s answer to the problem won’t be an effective one.