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Not market forces, see reserve bank interventions. Deflation is not disastrous for economic productivity but it is a side effect of economic productivity. Taxes
by zeahfj 10y ago
Not market forces, see reserve bank interventions.
Deflation is not disastrous for economic productivity but it is a side effect of economic productivity.
Taxes on earned income vs capital is a regressive tax system on the working class and a subsidy to the upper class.
Owner-occupiers and first-time buyer subsidies are subsidies to the speculators. Increase in house prices happen the moment such policies are implemented to capture the entire benefit. The policies are only implemented after speculators have invested and drive up housing prices. This only benefits speculators (who can also be first-time buyers).
- neolefty 10y agoI should have read the article before replying! Indeed, the article seems blind to capital taxes, focusing instead on income tax. Wealth tax is a pretty alien concept in the US -- I think it would face strong cultural resistance, and cause even more wealth flight to tax havens. And yet, I can see how it would tackle a big part of the problems described here. It may need to be implemented in a coordinated global fashion to avoid cheating. You'd need the rich nations to do it, with a working enforcement mechanism that spans international borders. That, combined with cultural resistance, sounds hard.
- zeahfj 10y agoNo need for a global system in taxes to reduce wealth disparity. Just need to stop subsidising speculation. Due to agency costs (information asymmetry etc.) it's harder to make large returns on large amounts so the wealth levels off. The problem with a global system in taxes is that the taxes will just be used to subsidise more speculation.