Should we tax the rich more?

Much ado is being made (rightfully) on Gary Stephenson’s exhortations to tax the rich – all over the internet and BBC, getting people of all ilks to wade into the debate.

Especially useful is @Steve Keen s and Phil’s youtube dialogue on the Subject.

Here is my take:

I am of the mind that the reasoning around Gary is going arse-backwards when it comes to the “the rich”. Let me explain: the rich are rich because they have operated with success within a system that is commonly-owned. The system is large and complex, including fiat currency, licensed actors like banks, frameworks of regulations and stimuli and constraints of all kinds. Some bits are publicly owned, some bits are private. Now. To operate in this system is a privilege, not a right. A company owner has the privilege to sell goods to citizens in the system, and to hire workers. You might say also that to be able to buy stuff or get a job is also a privilege. All actors are expected to not abuse this privilege. NOW: privileges come with conditions. It should be axiomatic that to earn the privilege of selling stuff you are expected to create jobs. For the privilege of being able to amass money you are expected to see to it that the poor are OK.

Think of Kate Rayworth’s Doughnut. We are getting into system dynamics here: as long as there are unemployed people, businesses should be expected to contribute to their livelihood, as the rules of the game. As long as wages do not cover living costs, businesses are expected to contribute, rules of the game. Because, in this complex system, a human system, we know that fairness is an attribute desired by all. That is why we have rules for games. Level playing fields. To identify the system and rule changes needed you cannot look at individual rules like taxing rich or even wealth, you have to see it system dynamically from above. IF you start from the paradigm that “To be a part of the system, you have to accept the system is designed for the good of all.” So you need to design constraints that put ceilings into place (you can’t screw up nature, you cant make mineral resources unavailable) and floors (as long as there are people who don’t have the basics you will contribute).

What we need from Steve’s system genius is a range of alternatives for people to democratically choose, possibly at the referendum level. For example, (my unfiltered “genius”) how about a surcharge on employers tax, based on profit per employee, to cover basic living costs for the unemployed. (the rich will think up ways to have full employment overnight). Or as long as carbon pollution is going on, a surcharge on amount of fossil fuel purchased per profit per employee. The point is, although I agree with the MMT that the government can spend, perceived fairness is human and paramount. So there needs to be alternatives that can be politically agreed on as to how the system can run fairly for the many.