Image by TW Collins
Fire every non-commission employee making more than seven times the median national income (all income included).
Put a 100 percent tax on all income over seven times the median, no exceptions for any type of income.
Put a 100 percent tax on on all inheritances over 50 times the median (that’s enough of a head-start on life for winning the lucky sperm contest).
Promote those who were earning less.
Secret: The people running the economy are not the best, and if they are brightest, we need stupider people. I base this on their results.
Going forward, the top income level will increase, as a percentage, equal to the average income of the bottom five percent and the median income.
This will sort out a lot of problems quickly.
First, it gets rid of the people running the economy today, who are obviously either hopeless fuck-ups or completely uninterested in results for anyone but themselves and a few cronies.
Second, it concentrates the minds of those at the top on the problems of those at the middle and bottom. They want that seven-times-the-median to be higher, so suddenly, they care about the poor and the middle class. A lot.
Third, it rather quickly deals with people with too much money now (yes, there is such a thing); if their seven-times the-median income doesn’t support their lifestyle, they will have to dip into their capital to pay for it. Because all capital gains will be treated as income, well, that should be fun.
Yes, there are all sorts of ways people can try to get around this. Plug them as fast as you find them and write the initial laws in very generous ways, like money-laundering laws. (Were you obviously trying to get around money laundering laws? If so, you’re probably going to jail. That’s how they’re written.)
Why seven times? Why not. It’s enough that no one can say they shouldn’t still feel very rich, and if they don’t, then something is deeply wrong with the median.
The general rule of policy is that policy which is good for the rich and the middle class is bad for the middle class because the rich get so much more from it. For instance, the housing bubble looked good for the middle class (and a few people won), but, really, it was so much better for the rich in that it gave them so much power along with other financial shenanigans, that they were able to gut the middle class.
Policy which is good for the middle class and the poor, or even just the poor, is good for the middle class. Poor people spend their money, and poor people who get better off become middle class people. A middle class which identifies with the poor and not the rich, will be secure, because they will support the wellspring of their own success.
There’s a bunch of moral and ethical arguments that should go into a piece like this, but it comes down to this: Every social welfare statistic worth mentioning tracks inequality, not absolute wealth, once you’re beyond the point of “enough so I’m not starving.” (See “The Spirit Level” for the nailed-down, stupidly overdetailed proving of the obvious.)
The rich are rich because society makes it possible, through aggressive enforcement of totally artificial property laws and massive infrastructure which benefits them far more than anyone else. The idea of ideas being property is completely artificial, contracts of adhesion that are standard in software are social bullshit, corporations are bundles of hugely valuable rights to avoid responsibility for losses, and all of that is before we even get to 20 trillion dollars (in the US alone) to bail out bankers who had genuinely lost everything, and that includes Goldman Sachs, because winning bets with counterparties who are bankrupt is worth ten cents on the dollar, and at that rate, Goldman is bankrupt too.
The people in charge have done a terrible job. It is a moral imperative to take that job from them and give it to people who will do it better than they do. (If they do it well, then the world and the economy won’t be so fucked.)
The people not in charge who are familiar with their jobs/businesses deserve a try.
There are bunch of things to add to this, but they all basically come down to two simple rules:
- Keep the rich poor.
- Never let money or power buy anything that matters.
A better education than normal, a jump in the healthcare queue line, avoiding airport security, flying on a private jet, avoiding traffic in a helicopter, not staying in the same hotels as anyone else. Nothing that matters. They can have nicer consumer goods, as long as they don’t matter, and that is all.
When the people running something are complete fuck-ups, you take away their power. That means their position, and as money is power, their obscene wealth. You replace them with someone else. It is that simple.
Eat the rich, or the rich will eat you.
And they have been dining well.
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Kat
Wouldnt they just move into the govt and make the govt provide their wealth instead?
Hugh
“corporations are bundles of hugely valuable rights to avoid responsibility for losses”
That is perhaps the best description of a corporation I have ever come across.
Kat, you need to define what you mean by wealth. If you have a society where good jobs, healthcare, education, and retirement are basic universal rights, how much more does anyone need? If you worked for the government, your income would get taxed the same way as everyone else. If you are referring to special privileges in lieu of wealth, about the only ones I can think of are travel and security, those too can be limited or eliminated by the plugging method Ian suggested.
There are various details to deal with, again as Ian noted. Individual vs household income, for example. I looked up the median household income for 2015. It was $56,516. So 7x it would be $395,612. I have for several years been pushing a tax structure which would limit after tax income to around $300,000. But that wasn’t set in stone and was meant to be a starting point for a discussion about maximum income and wealth. How much do you think they should be? At what point do any of us say enough is enough? Pretty much anyone and any family can have a great life with a lot less than $300k or $400k a year, so why seriously does anyone need a lot more than that?
I agree that the rich and elites have failed us. I would go further and say they have betrayed us. Their wealth and privileges were supposed to be performance-based. They did not perform. We should fire them, and get people in who will do a better job. And if the top echelons don’t think they could have a great life at $300k to $400k, then they’re idiots and we wouldn’t want them anyway.
brian
The part where the government has a higher income limit then the private sector, otherwise no one would want to work for the government – and how do you enforce it?
Stirling S Newberry
I think 6.9x would be better.
Willy
how much more does anyone need?
Indeed. But there’s that small ‘extreme temperament’ percentage of the population which is never happy without the continuous challenge and excitement they get from trying to conquer more and more using any means necessary. I wouldn’t mind them, if it wasn’t for the rest of us enablers who keep getting suckered in by all their lies and schemes.
kat
By wealth I mean things that can be bought with money. The canonical example is the luxury company car/house/nursery/services that is really your car. ‘Business’ trips where you go talk to your friends at a luxury ski resort where you stay at an expensive hotel. Or the company/organization pays for the ‘skip the line’ premium service in airports and so on. Or how health insurance given by employers started as a way to compensate employees as a way around wage maximums around WW2.
You also have cost of living problems. When the city’s rent (where all the jobs are) is 5x the national median because of NIMBY laws, it’s difficult to deal with that shock during the adjustment for most people. There is a lot of collateral damage with a policy like this.
Also any policy has to account for the ones that will break the rules. Most government basically is a psychopath equilibrium, because there is always that %3 of the population that will be totally okay with using violence and manipulation to get what they want. If they didn’t always exist, then things like anarchism and pacifism would work.
Huntly
Can’t wait for all the “I’m going Galt” comments. I think most will see this as an indecent proposal.
Hugh
Kat, if incomes are capped at $300K to $400K or 7x median income, this also caps real estate prices and rentals. People can neither hold nor buy large amounts of property because A) they don’t have the income to, B) most of the profits would be taxed away making it uneconomic (more trouble than it is worth) to hold and administer a lot of property when C) the society view your basic needs, such as healthcare, education, and retirement, as rights.
Fox Blew
Fantastic, Ian. I keep returning to your blog because you are one of the few who is both a meaningful critic AND someone who offers a program for the future.
Willy
Most “job creators” drive up basic living costs when they speculate with real estate or heating fuels. Most “freedom” is meant for “innovators” to become rentier capitalists. “Liberty” allows the exporting of jobs to socialist countries so their leaders can become rentier capitalists too. Most “patriots” don’t seem able to care that their children will be paying for that multi-trillion dollar “operation enduring freedom”.
Ché Pasa
Without fundamental systemic change, the problem I’ve seen with higher taxation rates and revenues is that Our Rulers see them as resources to squander on their forever wars, police state, imperial conquests, and give-aways to themselves and their patrons.
In other words higher tax rates and revenues do not (generally) benefit the people; just the opposite.
For example, we never saw a speck of “Peace Dividend” after the collapse of the Soviet Union. Much was promised, nothing delivered. More was taken if truth be told.
Bush 2 entered the White House with a putative budget surplus which many of us recognized would be promptly squandered on War, and so it was — to the point of straining the economy into collapse.
The people never benefited at all. In fact, they’ve been paying for it over and over again.
This isn’t solely because our rulers are stupid, belligerent and greedy (though they are), but it’s more because our governing systems are set up to produce this result.
You hear it all the time. “The first priority of government is to keep us safe.” That’s false of course. There’s nothing historical or constitutional about it, but many believe it simply because it’s said so often.
If anyone is actually made “safe” by the government, it’s the kleptocrats.
The rest of us are on our own — good luck, suckers.
So as long as we’re fantasizing, what about a system without taxation at all, but with strict controls on the creation of money and debt?
And of course a total prohibition on wars of aggression.
colm
No, we should go for more wealth concentration since it helps civilization. The more concentration of wealth, the more resources can be used to advance tech.
Tom R
Are your wage ratios at all based on the Mondragon model from Spain, where wage ranges vary from 3:1 to 9:1 among various co-ops?
Hugh
Hey colm, great snark. How about this one? We should go for more wars since these help civilization (well OK, maybe not the people actually in them but the same can be said about wealth concentration). The more war, the more resources can be used to advance ________ (fill in the blank).
highrpm
my 2 point plan for a healther collective than we have presently. (warning: learn to accept death as natural — not normal (“nature, not normal,” thanks gore vidal).)
1. outlaw all unearned income. (each member pays his own way or….)
2. 1 strike you out — capital punishment.
realitychecker
Here’s a modest proposal for ya: Scrape and build.
CarlOfTheForests
Colm you’re wrong because you didn’t prove why we need to help “civilization” at all costs- IMHO we need to help human beings; your focus on amorphous priorities like technology (much of which presents pressing moral dilemmas, like nukes, or lobotomies) amounts to a slaveholder’s attitude. Why advance technology over human beings? That extends to the Terminator scenario with killer robots standing over our burning houses. Think it through, cracka