Wealth Inequality
The Left Says
The wealthy have rigged the system to ensure that they continue to get richer at the expense of those who are less fortunate. The top 1% holds 35% of the wealth, and the bottom 50% holds 1% of the wealth.
The Right Says
If you take from the rich in order to give to the poor, you take away the incentive for work and innovation; eventually, you’ll run out of other people’s money to spend1.
The Solution
Generally, these solutions are not about picking sides, but pointing out the rational and practical paths out of partisan knots. This topic is different. In fact, except for Foreign Relations, Unwanted Pregnancies, Guns, and possibly, Immigration, all of the other problem areas that we’ve addressed stem from this one. No surprise that money is the root. The “conservative” approach benefits the ultra-wealthy exclusively, with no significant “trickle-down.” Liberal approaches reward and encourage sloth and really have millions sucking at the government teat. Neither foster the growth of a middle class. The solution comes down to death and taxes.
Remove all Estate Tax loopholes, except those for surviving spouses and charitable giving; no trusts, no exemptions, no deductions, no credits…no mind-bogglingly huge dynastic wealth. The estate keeps the first $10 million, and then pays a 40% “extreme wealth transfer tax” after that. Make this progressive, so that by the time we get to $50 million, the tax rate is at 70%. If you opt to take your money and go elsewhere before you die, then, pay a 33% expatriation fee after the first $250,000 (basically, an export tariff on large sums of money), following the same rate progression as for the Estate Tax above. Keep the lifetime gift limit at $5 million per individual, and this includes inheritance. Lest you get worked up, consider that this “silver spoon” tax likely doesn’t apply to you, since it only affects the top 0.2% of estates. But what about the small businesses and family farms, you ask? Of all the 2.7 million estates administered in 2017, only 5,500 of them would face ANY estate tax under this plan, and only 80 of those are small businesses or family farms2.
Income disparity is the other side of this coin, and that is fixed in the tax structure.
1 “…and Socialist governments traditionally do make a financial mess. They always run out of other people’s money.” ~Margaret Thatcher
February 6th, 1976; while she was head of the oppoisition (Conservative) party of the UK
2 The Wrong Solution to the Right Problem ~Time