Continuing the tradition of trolling for clicks, NYT has an op-ed piece by a worried heir to Marie Antoinette, Peter Georgescu, Chairman emeritus of Young and Rubicam. He is worried along with some of his other billionaire friends about ending up like the Sun King’s daughter-in-law. The reason: the yawning gap in income between the 0.1% and everyone else.
Business has the most to gain from a healthy America, and the most to lose by social unrest or punitive taxation.
His analysis of the problem is spot on, mainly that business is not investing in either research or its employees.
The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees.
And how does Marie’s heir want to address this problem? By asking taxpayers to foot the bill, so that businesses can pay their employees a fair wage.
There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less. The program would exist for three to five years and then be evaluated for effectiveness.
How does one pay for these tax incentives? Not by increasing taxes, since that would be punitive according Mr. Concerned Capitalist.
If inequality is not addressed, the income gap will most likely be resolved in one of two ways: by major social unrest or through oppressive taxes, such as the 80 percent tax rate on income over $500,000 suggested by Thomas Piketty,
The top most marginal rate currently is way less than 80%. In fact it is nearly half of that, 39.6%. What does Mr. Concerned Capitalist think is a fair, not punitive tax rates on his fellow one percenters? Gotta love this new capitalism, where you can socialize the risk and privatize the rewards. Win-win, for Georgescu and friends.
By two_kittehs ( Picture by: dorothyfrancesgoldstein)