Taxation: a Necessary tool for civiliziation

Complaining about taxes is universal.  It is more than just the money with our distaste extending to calculating and filling our forms.  This book deals primarily with the American tax system, but with many references to systems including Canada, New Zealand, France, United Kingdom, Netherlands, etc.  

 T.R. Reid and many others consider the American taxation system is a "mess" and in the book he explores the world to determine a better system.   A quote from Bill Bradley, "You can't just tinker.  Facing a huge almost incomprehensible system.  You have to take it on.  Your goal has to be to fix the whole damn thing."

Why are taxes necessary?  Many nations do not tax, or tax relatively lightly.  Oil rich countries in the Middle East get enough revenue from selling national resources.  Small countries with strong tourism (eg. Monaco) squeeze money out of visitors.  Some countries in earlier times just commandeered essential products.  The need to tax is lightened when money can be borrowed or be printed.  Taxes are said to be the "price of civilization"  http://www.therealjohndavidson.com/2012/07/price-of-civilization-book-review.html

The ideal in trying to fix "the whole damn thing" is to follow BBLR which stands for broader base, lower rates.  There are so many exemptions, deductions and other complications that merely removing some of them would allow for lower rates.  Governments are likely to need more revenues in the future as they take over more functions so it becomes a complicated issue.

An example I have some personal knowledge of, from New Zealand.  Their sales tax (VAT) is on pretty much everything and is kept low with less disruption to retailers.  For income tax they have done away with exemptions popular elsewhere, but in fact allows a lower rate.   

The United States under the guidance of Ronald Reagan and Tip O'Neil agreed on a taxation system very similar.  Actually the details were worked on by Bill Bradley, Senator from New Jersey and others.  I knew him as a New York Knick, who had been a Rhodes Scholar and more personally had responded to a letter I wrote him regarding a research project.

Deductions are protected by vested interests, but are often not as effective as claimed and hurt the system.  Many are meant to encourage good behavior.

Mortgage interest deductions favor those with money.  Charities have proved to be resilient and would benefit from less need for govt. rules.   Electric cars, although a worthy objective do not justify $7,500 credit on $100,000 cost.

Inequality has gained a greater focus as it has been increasing in most western nations.   Read more here:  http://www.therealjohndavidson.com/2014/10/capital-in-twenty-first-century.html   The flat tax is usually promoted by wealthy people with the benefit that it is simpler.  In effect the rich pay less and the middle class pays more.  Thomas Piketty advocated a wealth tax as the best remedy to even up the classes, but admitted there would be resistance.    

The estate tax may be the best tool against inequality.  Termed a "death tax" by right wing critics is in fact a tax on the living.  Most people, say 80% need not be subject to it.  It should be progressive with the idea  partly to optimize revenue, but also "spread the wealth" that so upset Joe the Plumber.--education is another equality leveler and perhaps a percentage can be earmarked 

T. R. Reid brings up many examples of resisters.  Gerard Depardieu, a big French cinema actor and producer who was so fed up with his high rates that he denounced his citizenship and moved just over the border to Belgium.  Apple and Google among many others have discovered ways to transfer their income to lower tax regimes.  Recently Janet Yellin has revived an effort to co-ordinate international efforts to thwart the drive to the bottom of taxes.

Corporation taxes have been a good source of revenue, but they have also attracted a lot of abuse.  Ideally they should be abolished, but that could only happen if the money could be replaced with another source.  It seems to me that corporation taxes are thought of as an expense that can be passed onto a customer.  That suggests to me  that a VAT (value added tax) would be one source.

One of the concerns of VAT is that they are regressive.  That can be dealt with income tax rates that would be more lenient for lower income earners.  Another concern of some critics is that VAT are not usually stated.  Here in Canada we are told the GST amount making us conscious of the tax, but also annoying us with an extra calculation required before our purchase decision.  VAT advocates feel that hidden, most people do not notice and it can be raised while drawing little attention.  The taxpayer really should know.

In the U.S. there is a retail sales tax which is applied only once  In Canada and over 150 countries there is a Value Added Tax.  I remember when Canada was adopting a G.S.T. (a form of VAT) and there were many complaints.  I was in a position where I had to calculate pricing starting from the wholesale price that had a manufacturer's tax that was higher than the proposed new tax. What I didn't fully appreciate was the VAT process which applies to every stage of purchase starting with raw materials to any stage of manufacturing.  The GST rate would apply, but when the manufactured good moved to the next level which could be another manufacturer or a wholesaler the tax would be applied, but since they had already paid a tax that amount would be given as credit.  A couple of advantages ensued.  Each level paying the tax claimed a credit which became self enforcing.  The tax paid in smaller but more frequent installments was steadier.

Sin taxes have been effective in not only raising money, but also in discouraging harmful behavior.  The best example might be tobacco.  If totally successful the government would have to seek out another source of revenue.  Health authorities are already suggesting sugar that causes obesity and diabetes.  After a few initial setbacks, sugar has successfully been taxed with one example being Mexico that has reduced diabetes as well as increased revenue.  

Another commodity to be taxed would be carbon where done it has proved to minimize use and raise funds.  There has been resistance as the public is inconvenienced.  Some of the inconvenience can be offset though tax credits as in Canada.

FAT stands for financial activities tax and can be so small to not be noticed.  This can be one way of accumulating significant revenue while placating outcries about the very rich manipulators.

The Panama Papers were uncovered by German journalists in 2016 who not only maintained secrecy involved foreign journalists.  It was discovered that a legal firm, Monsack Fonseca was able to help redistribute large amounts of wealth to avoid taxation.  Some of their clients were Jackie Chan, Lionel Messi, and countless people close to prominent politicians.  The Joint International Tax Shelter and Collaboration Network took an interest and continues its crusade to prevent tax evasion through tax havens.

The world is changing in the sense that it requires fewer people to produce the goods and services needed.  This is a situation very easy for wealth to further concentrate.  One suggestion gaining momentum is a (universal) basic income.  How that could fit into a taxation system needs to be worked out.  To me the most logical way is to include it as income that can be taxed.

All income should be treated equally including wages, interest, dividends, basic income supplements and capital gains.  Concerns about the need for investments should be dealt with on the merits.

In the United States and Canada filling out the annual income tax form is time consuming and expensive.  Other countries have simplified the process.  For most people the information is readily accessible to the government and could be easily calculated with only a form requiring confirmation. 

Simplified to not only make it easier to administer, but also hopefully that make personal and business decisions neutral.

Everything brought up is subject to discussion.  There are trade offs.  With the goal of simplicity and low rates, every change needs to challenged.  It can be pointed out for every item not liked there are other items that are desired.

A few earlier thoughts of taxes.

The job of a tax collector:  http://www.therealjohndavidson.com/2015/04/tax-collectors-dirty-job-frowned-upon.html

My experience as a tax preparer:  http://www.therealjohndavidson.com/2019/01/what-i-learned-as-tax-preparer.html

The Great Leveler: Violence and Inequaltiy

Barack Obama thought, rising inequality "is the defining challenge of our time."  The future is intertwined with several concerns, climate change, pollution, nuclear tensions, but underlying them all is a feeling that the average person has no impact.

The rich get richer and the poor get poorer has long been a cliche, but like most cliches there is a base element.  Inequality is natural and if unchecked tends to increase.  Not all bad as the pursuit of wealth has motivated many to innovate and work harder to improve the lives of the rest of us.  Scheidel uses some of the material uncovered by Thomas Piketty, although does not agree with all his conclusions.  http://www.therealjohndavidson.com/2014/10/capital-in-twenty-first-century.html

Using a wide range of information Scheidel uses the Gini Co-Efficient to compare different societies at different times.  Obviously there is a limit imposed by the lack of numerical data for much of what he studies.  He improvises with such things as burial goods, size of housing, prices of different commodities.  His conclusions do not suffer.

Violence has proved to be the most reliable leveler of inequality.  The author classifies what he called the "Four Horsemen" the factors that have leveled inequality:  1). mass mobilization warfare;  2). transformative revolution;  3). state failure and 4). lethal pandemics.

In the course of over 300 pages he recounts instances of these leveling factors.  Inequality first became a fact with the agricultural revolution which made possible specialization and the accumulation of surpluses that enabled some to increase wealth and power.  Before in a hunter foraging economy everyone was important for overall survival and although some people are more talented or hard working than others they could be kept in line.  Two tools enabling inequality were land/livestock ownership and the ability to transmit wealth to future generations.

Many minor events could have a very temporary effect on inequality, but it takes a massive event to really level inequality with some examples being World War II, the Black Plague (followed in quick succession with other pandemics), the Russian Revolution, European invasion of the Americas  and the American occupation of Japan.  Some major events actually increase inequality or the wealthy are replaced with other wealthy people.  In all cases inequality restarts significantly over time.

What about the future?  The author concludes that the four leveling factors will have less likely impact in the future, so it seems likely inequality will always be with us.  Modernisms work both ways.  Those in power have more tools to stay in power.   The masses of people have more effective communication and ability to organize. 

There have been many suggestions to rectify or moderate inequality.  Progressive taxation, estate taxes, wealth taxation, boosting unions, universal medical insurance.  Poorer people tend to vote less than their wealthier fellow citizens suggesting perhaps that education might make a difference.  There will be resistance and costs to any radical solutions.

An earlier blog gives the perspective of John Maynard Keynes who thought the only purpose of economics should  be that everyone could live better.  He understood about the pendulum of the ups and downs of the economy.  http://www.therealjohndavidson.com/2012/04/book-on-john-maynard-keynes.html

Although inequality has the advantage of offering incentives that generate innovation and hard work, there are disadvantages that become more evident as it becomes more extreme.  Number one is the inequality of opportunity that eventually hurts everyone when merit is secondary to connections.  Universal health care ensures that the poorest have an opportunity to receive preventive care that ensures the health of the rest.  A sense of fairness such as accepting that some people contribute more and deserve more is best achieved when the discrepancies are not too threatening.

My own thoughts on the inevitability of inequality.  If you took a random room of 100 people and were somehow able to redistribute the wealth to for example, $100,000 each, within minutes things would start to change.  Some would want to spend some to enjoy some of the things they had long wanted.  Others would see an opportunity to sell something, loan money so others could get what they want faster.  Some might be a bit fearful of the "rainy day" and keep their spending under (relative) control deferring gratification.  Some would steal from the others in the form of theft, intimidation, or fraud.  Of course some have more relevant talent than others.  It boils down to short term thinkers versus long term thinkers and yes a bit of luck, but essentially this has been our history.  

There is a lot of meat in the book provided by Walter Scheidel.  I found many of my thoughts debunked, but also gained a better understanding of the mechanisms that account for inequality.  The future is unpredictable, but many of the factors that will determine the life style of future generations are identified.

Confession.  I stumbled on this book because I had heard of a more recent book of the author, Walter Scheidel called "Escape from Rome."  Being cheap (and patient?) I just checked the library which had not yet ordered it, but had this other from the same author.  I have long concluded that there is more than one good book in any author and we often miss the early ones when they might have been more enthusiastic because they had not yet reached a tipping point.  I am on the look for "Escape from Rome" and for that matter other books by Walter Scheidel.

Rise of the Robots

You remember all those science fiction movies where robots run things?  They seemed pretty far fetched at one time, but lately not so much.  In the past various technological breakthroughs have disrupted business and society, but after a few adjustments our standard of living rose and everyone seemed to find a job that helped pay their bills.  Times are a changing.  Martin Ford helps explain in "The Rise of Robots."

You could always get a job maintaining the machine.  People would be paid enough salary they could afford to buy other things and keep  other people working.  We are rapidly evolving towards where less and less people are needed to even watch a machine and wages will not be enough to generate enough spending for other jobs.

To illustrate how the situation is progressing, Martin quotes from an American government study covering the years 1998 to 2013.  In that period when the American population climbed by millions and the GDP went up $3.5 trillion (allowing for inflation) but the hours worked were the same for both 1998 and 2013; 194 billion hours.

Computers can analyze immense details using the cloud and are becoming increasingly analytical, creative and replicable.  Their judgment is being considered more reliable in some cases than human judgment.  Artificial Intelligence has had many false starts, but is progressing.  Robots will have access to incredible amounts of information and have ever increasing abilities to sort through, analyze and make decisions.

Reading the news one can see future conflicts.  A much greater ability to automate fast food already exists, but has been put on hold partly for the availability of cheap labour.  With talk of minimum wages going to $15 an hour attitudes will change.  Automation also has the advantage of being perceived as more hygienic.  Education and health fields are perhaps the most difficult for automation, but already inroads are being made.

60 years ago some of my public school teachers were predicting a world taken over by robots, but they saw it as creating a leisure world for the masses.  Today the bottom line is that the robotic revolution will increase profits for those at the top while those at bottom will have great difficulty in getting a job and most jobs will have lower wages.  The rate of change is very likely to accelerate.

Martin Ford takes on myths.  Too many economists (and others) see a (distant) problem, but take it for granted that society will adjust with only minor concerns.

China is supposed to pick up the consumption slack, but with one child policy they are aging rapidly--women are scarce and men have to save up money to attract marriage partners.  They too are replacing cheap labour with robots.

Demographics with aging population will release job opportunities for the young.  Actually robots have been snapping up opportunities faster than graduates are available.   In Japan with the most aging population, robots are becoming critical.  A personal investment in Honda was predicated strongly on this idea as they are among the world leaders in robotics.

Education is not the solution envisioned by politicians.  First most jobs are repetitive and computers are taking over more and more tasks not only of the repetitive jobs, but now encroaching on the territory of professionals.  In fact we also have is credential creep, meaning education is just moving the bar on job qualifications without actually being necessary for performance.

While some are touting the role of the job creators others see a different reality.  Investors and business owners are looking to minimize the cost of labour.  Off shoring is only one concrete indication and robotics is an even bigger force.  When people lose a job, when their wages are diminished, when the future seems uncertain (job creators are supposedly concerned about uncertain regulations), when credit dries up, people stop spending.  When that happens business slows down.  A more basic problem become how to distribute purchasing power.

Henry Ford is credited with paying his workers enough in wages to actually buy one of his cars.  Robots don't buy anything, although they do consume maintenance.

The author's suggested remedies will run up against the party of the status quo, otherwise known as Republicans (and they have their counterparts in the rest of the world.)  Change is discomforting to the status quo, even though we are all part of the change.  Those at the top want to stay on top, those on the bottom are scrambling not to lose their ranking in the pecking order.

Guaranteed income in one form or another should be adopted.  It needs to be set to be liveable, but not to eliminate incentives.  Martin suggests education could warrant higher pay, even if just to have more productive leisure time.  Taxpayers contributed to research leading to technology innovations  (http://www.therealjohndavidson.com/2015/07/the-entreprenurial-state.htmll) and that fact can help rationalize the guaranteed income as a dividend.  A safety net does not just make some people lazy, it also gives others the confidence to take a risk that could result in necessary innovation.

Martin refers to Thomas Piketty's book and adds that robotics could just accelerate inequality.  Read more:  http://www.therealjohndavidson.com/2014/10/capital-in-twenty-first-century.html

Those in power have never been in a better position to consolidate their power, but many concerned citizens and voters can impose a different perspective.  Unemployment (and under employment) are top of mind for voters and vested interests can manipulate government bodies to bend to their will.  At the same time climate change can be tackled without losing a lot of jobs (but losing profit for those invested in fossil enterprises), but again can end up being part of legislative blockage.  A lot of choices to be made.  We all need to be better informed.  This book deserves a lot of attention.

BOOKS REMEMBERED FROM 2014

You'll never be able to read all the good books, but for some people a good book is priceless.  Some of my favorite treasures come from lists and hopefully some of my readers will find something precious to read from my list.  Matching a book's contents with a reader's readiness can be a difficult task, but can be part of the fun.

"The Luminaries" by Eleanor Catton,  won the Booker prize and with the topic of New Zealand was a must read for me.  It deserves its recognition even as a first novel.  Layered with flashbacks towards solving a mystery.  Interesting characters.  I learned of another New Zealand author on vacation, Charity Norman and loved her "Second Chances"  as well.

"419" by Will Ferguson won the 2012 Scotiabank Giller award.  Most of us have received an email from Nigeria and wondered how anyone could be so dumb.  A lot depends on your background and emotional situation.  The author explored both sides of the con game.  Nigeria is a major country, but obviously with the majority living in poverty.

Herman Koch, a Dutchman was known in North America for "The Dinner" which was a well constructed book.. "Summer Home with Swimming Pool"  Same technique, anchored by an imperfect narrator gradually uncovering different layers.

"The Terminal Experiment" by Robert J Sawyer is most amazing when you realize it was written in 1993 projecting to 2011.   It was revised in 2009.  When first written in 1993, the internet was very new and the world wide net not yet invented.  He decided to keep the dates so that we could read what someone thought of the future in 1993 impressing me. A good mystery, but also full of philosophical questions.  At one reading a student told the crowd that she chose to major in philosophy because of Robert J Sawyer.

"May Day" by Nelson DeMille and Thomas Block--suspenseful and now I view as one of my favourite DeMille novels.  Recommended by Christian Tanguard.  More on Nelson De Mille:  http://www.therealjohndavidson.com/2012/05/tribute-to-nelson-demille-real-writer-i.html

Terry Fallis always makes me laugh.  Early in the year I read "The High Road' finishing off a two book series with a Canadian political framework and later in the year read "Up and Down" that worked in a public relations background and both were hilarious.

"Still Alice" suggested by Mary Ito who had author Lisa Genova on Fresh Air as a guest.  Helps get inside the head of someone grappling with early onset Alzheimer's.  Also how it affects the family. As happens with hypochondriacs I find myself identifying with the symptoms.  One of my motivations for blogging is simply to preserve memories which you don't realize how important they are until they are gone.

Hamilton Reads selection from the library  "The Redemption of Oscar Wolf"  by James Bartleman was a very good choice.  James Bartleman, grew up partially on Indian reserve and rose to become Lieutenant-General of Ontario.  The book reflects his background.  Also enjoyed an interview as part of the book.   Sorry I missed the meeting with the author.

"The Book Thief" recommended by Facebook friend Vijakumar mk Nair   Read the book before seeing the movie.  Set in Nazi Germany, depicting that not everyone was brainwashed.  Very good

In truth I read a lot of books with a business perspective, others with a political perspective tied together with a social perspective.  To make a living it is important to understand how money flows and how it is likely to flow in the future.  Still there can be practical personal wisdom.

"Capital in the Twenty -First Century" by Thomas Piketty spelled out in almost scientific terms how inequality is virtually inevitable and also too much is harmful.  Naturally, established wealthy people denigrate it, but I see a lot of truth.  Inequality is not all bad, after all it helps provides incentives, but at one point it creates barriers.  Finding that balance is critical for human survival. Not the easiest book to read, but perhaps one of the most detailed and important constructions of the way the world works.  Should be required. http://www.therealjohndavidson.com/2014/10/capital-in-twenty-first-century.html

"Absolute Value"  another game changer book.  It comes down to how much knowledge consumers now have access to which gives them leverage they never had before.  Marketing can no longer depend just on brand strategies.  Learn more:  http://www.therealjohndavidson.com/2014/05/absolute-value.html

"The Age of Oversupply" was very thought provoking.  Best explanation I have read about how interest rates remain low and unemployment is a problem in the West. Has much more insight than conservative remedies for our current financial woes  Learn more:  http://www.therealjohndavidson.com/2014/04/the-age-of-oversupply.html

"Second Machine Age" points out that the future will require far fewer traditional workers.  What will we do?  Read more:  http://www.therealjohndavidson.com/2014/07/the-second-machine-age.html

"The Art of Engagement."  Why do many good ideas never become reality?  In big companies it is often because there is a big gap between what a leader thinks and how it is translated to those who have to execute.  Read more:  http://www.therealjohndavidson.com/2014/12/the-art-of-engagement.html

"The Retail Revival" points out that changes offer opportunities for those who understand.   More information could work for consumer benefit.   Read more:  http://www.therealjohndavidson.com/2014/09/the-retail-revival-as-seen-by-doug.html

Non fiction not business oriented, but impact how you make a living.

"The Power of the Herd" points out that humans could learn a lot from horses, a prey animal.  Some examples of those who have included George Washington and Alexander the Great.

"The Social Conquest of Earth" asks existential questions.  Explores evolution, particularly as groups.   Read also "Anthill," a fictional novel by the same author that.--illustrates his contention that fiction can uncover truths.  Big shock is that ants have a lot in common with humans.  Read more:  http://www.therealjohndavidson.com/2014/11/the-social-conquest-of-earth.html

"Talking to the Enemy".  A lot of attention is paid to how we should deal with terrorists, but very little applied to understanding how they came to be.  You can only understand the "enemy" when you make an effort at two way communication.  Red more:  http://www.therealjohndavidson.com/2014/11/talking-to-enemy-how-else-can-you.html

"The End of Power" reports on a shift of power.  There are still powerful people and we need some of them to get good things done, but power has dispersed and often to our disadvantage.  Lot of different trends in the modern world that may seem contradictory, but are important to understand.  Read more:  http://www.therealjohndavidson.com/2014/08/the-end-of-power.html

"Triple Package by Amy Chua is an interesting study of ethnic groups and upward mobility.  Learn more: http://www.therealjohndavidson.com/2014/03/triple-package-useful-study-in-group.html

"Overbooked" about the travel industry is one of my popular book blogs.  Learn more:  http://www.therealjohndavidson.com/2014/02/overbooked-and-thoughts-on-tourism.html

"Reign of Error" by Diane Ravitch is a provocative book on American education.  Read more:  http://www.therealjohndavidson.com/2014/02/reign-of-error-what-direction-should.html

Biographies have been inspiring.  How did someone overcome obstacles to achieve higher status and accomplish important deeds?  Doris Kearns Goodwin had previously written "Team of Rivals" describing Abraham Lincoln's rise to power and how he turned his rivals to help accomplish important goals.  This past year I read "The Bully Pulpit" about a character I knew more about in caricature, but in fact had made decisions that led to significant historical changes (most of them positive).  Learn more:  http://www.therealjohndavidson.com/2014/04/the-bully-pulpit-by-doris-kearns-goodwin.html

Finding the right book for your mood and circumstances can sometimes be daunting.  The books listed have proved worth the effort for me, maybe for you.

to read about my favourite books of 2013:  http://www.therealjohndavidson.com/2013/12/books-that-impacted-me-in-2013.html

CAPITAL IN THE TWENTY-FIRST CENTURY: EXPLAINS INEQUALITY

"Capital in the Twenty-first Century" by Thomas Piketty was in the news enough to get my attention.  It is not the sort of a book to read when you are tired or sipping wine.  It requires alertness to fully appreciate its value.  I was not able to devote my best attention to it, but feel it is truly monumental.  There has been some criticism, but most of it seemed very self serving by those who thought the status quo was very comfortable for them.  As I finished this book I watched "Inequality for All" that had a brief reference to Thomas Piketty and reinforced the material.

One of this book's advantages over other economic classics is that Piketty had access to much more information.  His focus was on inequality.  Piketty was able to detect patterns and of course exceptions that actually illustrate economic forces.  He believes before statistics were kept that capital income (such as land rents and investments) almost always grew faster than national economic growth.  The only exceptions occurred because of major events such as wars, revolutions and Depressions.  At some point inequality will incite rebellion.  Attitudes change, but history is too often forgotten.

He uses many equations that help you understand his argument.  One key one that any reader should understand simply means the rate of return on capital is greater than the rate of national growth.  Very seldom has that rule not been true and by itself helps explain how the rich constantly get richer. at the expense of common workers.

Slavery (i.e. treating some humans as capital) contributed a great deal of wealth to southern plantation owners.  The fact that it was dehumanizing was consciously overlooked.  The role of labour is too often diminished.

Europe before 1914 was more unequal than the United States, but they both reduced inequality as a result of the shocks between 1914-1945 and progressive taxation.  After the World War II equality actually increased, but by 1980 (when Reagan was elected) started to change to a more normal status.

Inheritance is a key factor in concentrating wealth.  Many start as entrepreneurs with smart thinking and hard work, but eventually they or their heirs become rentiers, i.e. using capital to generate the majority of their income.

Some politicians dismiss inequality discussions as just envy.  The people who deserve to enjoy the riches of life got there on merit and those others just weren't smart enough or worked hard enough.  Meritocracy is an ideal, but sadly the reality leaves much to be desired.  Many of us believe that theft, luck, timing all played key roles in many fortunes.  And what merit justifies the next generations living lives of luxury with little contribution to society?  Robert Reich in his film and many columns points out just how rich the rich are, something the masses are unaware of the extent.

One of Piketty's key recommendations is a Global annual progressive tax on capital, to be sure is more an idea.  Most people would not be required  to pay anything and the top rate would be something like 5%.  Requires a lot of global co-operation.  For a few decades nations have been competing to lower their rates and individuals and companies have been taking advantage.

Another contention from the author is that wealthy people should be helping to pay down the deficit by paying more taxes instead of enriching themselves by loaning money in the form of government bonds.




Piketty and Reich are not against capitalism or innovation or entrepreneurship.  We need incentives to encourage innovation, and hard work. Education has traditionally been the key to improving individuals as well as society, yet many rich people resent taxes going to improving schools or want to control what  and how it is taught.  Health care is another area where the rich begrudge the poor getting "free" care.  Much infrastructure seems unnecessary unless profit can be made directly.  Ironically many things that benefit most people also benefit those with more money.

I believe Piketty's work deserves more consideration. Reich makes too much sense for the main stream media.  Their messages are not endorsed by the 1%, but are critical to understand if civilization is to survive.