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We Desperately Need Maximum Wage Laws (jacobin.com)
submitted 11 months ago by to c/politics@lemmy.world
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With wealth inequality and billionaire control over American society growing ever more obscene, it’s well past time to implement a maximum wage limit.

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[–] 2 points 11 months ago (13 children)

This is a much more difficult problem than you suggest. Taxing standing wealth of 1.8 million would limit so much of the upper middle class that actually drives economies.

Given how many people have their wealth invested in theor home, how do ypu propose to do this or is everyone constantly downgrading the home they are invested in?

Nothing in economics is ever "easy".

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  • [–] 7 points 11 months ago (7 children)

    1000x annual minimum wage is 14.5 million. That's not the savings of the worker class (a conservative investment would provide enough return to live without working). And the point is that it's tied to minimum wage. Want to be taxed less on your wealth? You gotta raise the minimum wage.

    You're right in saying it's a bit more complicated than that--my two point suggestion is oversimplified--but my original point stands: the solutions are less complicated than getting rational legislation passed in a system where the checks and balances are bought out.

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  • [–] 2 points 11 months ago (6 children)

    Ooof, how did I fuck up themath that badly? At 14+ million it's different. That's a lot of wealth compared to the average upper middle class family.

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  • [–] 2 points 11 months ago (2 children)

    Is the way you judge what's wealthy to look at your own situation and target something comfortably above that? There's plenty of people who will surmise that your situation is comfortably better than theirs once that power is available to the public.

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  • [–] 1 point 11 months ago

    You don't have to base it on your own situation, you can base it on cost of living or other objective values.

    There's a big difference between 1 million and 10 million. With a modest 5% return on investment, 1 million nets you $50,000 per year, which is enough to support a very modest lifestyle in some places (near poverty in others). 10 million with the same investment nets $500,000 per year, which is more than enough to retire to a very luxurious lifestyle and accumulate more wealth along the way.

    And that's still less than the 14.5 million I proposed, so that person would still not see any wealth tax.

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  • [–] 0 points 11 months ago

    No it’s based on a ton of actual hard statistics that focus on relative buying power vs what the state supplies. Many Europeans who make less than I do have a higher QoL than I do because their education and healthcare are subsidized/free.

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  • [–] 0 points 11 months ago (2 children)

    It's not that much different.

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  • [–] 3 points 11 months ago (2 children)

    Real estate is a good example of the trickiest thing about "simple" wealth tax.

    I bought a house, and 20 years later I have to pay more taxes because my neighbourhood is more desirable?

    Okay, easy solution, you get one free house you need to reside in for x% of your time per year.

    But say I bought a painting from a local artist, even a friend, and decades go by and they've gone on to become ultra famous. Do I now have to pay more tax because I possess something that has become valuable?

    Obviously thats a very unlikely scenario, but you can see the principle issue.

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  • [–] 3 points 11 months ago

    For the numbers I suggested, I don't think you'd realistically hit these types of cases.

    1000x annual minimum wage is $14.5 million. Based on a quick search, the threshold for the top 1% of Americans with respect to net worth starts at $13.6 million in 2023. So over 98% of Americans would never see the impact of a wealth tax like this.

    If minimum wage were brought up to a realistic level, say $20/hour (still low, but better than the current $7.25), that threshold jumps to $40 million. This would capture somewhere between the top 0.5% and 0.1%. This is excessive wealth.

    In the case where your painting is suddenly worth $50 million, yes--you'd have to pay more tax. But I think that many dollars might be some reprieve from the pain of selling it.

    Applying sensible economic policy to extreme wealth is easier than general economic policy.

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