US economy

What’s Really Radical? Not Taxing the Rich


Over the sweep of history, the main reason that societies have declined, as the scholars Daron Acemoglu and James Robinson have written, is domination “by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.” The name of Acemoglu’s and Robinson’s book on this phenomenon is, “Why Nations Fail.”

It’s worth keeping all of this in mind when you hear critics (or journalists) describe the economic proposals of the Democratic presidential candidates as “radical.” They’re not radical, for the most part. The proposals are instead efforts to undo some of the extreme economic changes of recent decades and to ensure that most Americans workers — not just a narrow elite — fully benefit from economic growth.

The proposals also happen to be popular, broadly speaking. On social issues, like abortion and immigration, the country is deeply divided. But clear majorities support higher taxes on the wealthy, higher taxes on corporations, more education funding and expanded government health insurance. No wonder: Americans don’t resent success, but they do resent not receiving their fair share of economic growth.

The coming primary campaign will be a good time for the candidates to hash out which specific ideas make sense and which don’t. So far, the agenda looks pretty good. Elizabeth Warren has a plan to increase workers’ power within companies — and help them get larger pre-tax raises. Cory Booker and Kamala Harris want to lift the after-tax pay of the middle class and poor. Kirsten Gillibrand and others support reducing major living costs, like child care and education.

Perhaps most important, some Democrats have begun pushing for a wealth tax — to reverse the upward redistribution of the past 40 years. Warren has proposed an annual 2 or 3 percent tax on large fortunes. Bernie Sanders has proposed a big increase in the inheritance tax.

These wealth taxes are a classic example of policies that are less radical than their opponents claim. Do you know who already pays a wealth tax? Middle-class Americans. It’s called the property tax, as Noah Smith of Bloomberg Opinion has noted. Every year, homeowners pay a percentage of their house value in tax. A house, of course, is the biggest asset that most families own. If middle-class families can pay an annual tax on their main source of wealth, wealthy families can, too.

The United States as we have known it — optimistic, future-oriented and more powerful than any other nation — cannot survive the stagnation of mass living standards over many decades. I’m glad to see that some political leaders understand this and are trying to recapture a core feature of American life.

Maybe we should start describing those leaders as conservatives.





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