Capital In The 21St Century: Thomas Pikkety - Calling Bobbyfischer.

[dkc]

1 week ayyindi chadavataaniki.

 

very engaging book. Important points the author makes are.

 

1. when returns on capital rises faster than the GDP, income inequality rises. (Apple CEO Tim Cook's 2011 compensation was $378 million, which is 6258 times more than average Apple employee)

 

2. The current levels of inequality in US are scary and similar to Columbia and apartheid South Africa

 

3. The ideal tax rate on capital that the author suggests is 80% on incomes exceeding $500k, and a wealth tax for 2-5% every year, along with an inheritance tax of 25%.

 

4. During the World war, capital was taxed as high as 90%, and a great number of wealthy people lost their entire fortunes to tax at that time.

 

5. US had a period of great GDP growth after the world war, where labour unions were strong enough to negotiate good pays and companies where generally afraid to pay CEOs around more than 25 times the average employee.

 

6. This was until Raegan in the US, and Thatcher in UK, sided with the rich to drop tax rates on them.

 

7. Capitalism, generally awards the rich, but with enough political vision, it can be forced to distribute spoils equally.

 

My take:

 

Time for a war. Let the UN confiscate every last nuclear weapon in the world, and encourage countries to fight expensive wars for a few years. :)