Better Insurance Against Inequality

[dkc]

http://www.nytimes.com/2014/04/13/business/better-insurance-against-inequality.html?ref=business&_r=0&gwh=8AB2732502886D77464AB63CBA0F023B&gwt=regi

 

Economics Nobel Prize winner, Prof Robert Shiller, takes cue from Thomas Piketty's work on rising inequality in incomes around the world to argue for inequality-indexed tax system.

 

In such a system, the rich will be taxed at above 75% of their incomes.

 

The idea for such a tax was already presented in a draft research paper in 2006, but since the authors felt that the proposal wasn't ready for advocacy, they held off from publishing that paper.

 

Although the proposal makes a lot of sense, and has tons of data to back it up, there are some reasons it won't be taken up enthusiastically.

 

1. negative economic effects, including tax avoidance (like the author mentions)

2. highly ambitious and deluded middle class who think their moment in the sun is just around the corner and wouldn't want to be taxed 3/4th of their incomes in the future when it happens.

3. distrust of the elite's intentions by common people.

4. religious notions that give a false sense of entitlement about one's money, without any understanding of the giant monetary and financial system that runs it.