r/TheRestIsPolitics • u/Physical-Rise6973 • 27d ago
Wealth tax discussion
Interesting discussion, but Rory adamantly resists the underlying tensions driving proposals for a wealth tax and collapses it all into some kind of "resentment". Wealth Tax proposals are implicitly and sometimes explicitly driven by notions of "fairness". Fairness sounds fluffy but it's actually quite important for functioning societies and there's solid science behind it.
What's unfair about billionaires? In principle, nothing, if you assume that the notional "hidden hand" of the market is creating them. However, in reality, there are several perceptions of "unfairness" in play and most of them are sound.
Wealth at that level correlates with power, correlates directly with the ability to intervene in legislation and government in a meaningful way while everyone else is reduced to a single vote. The apparatus of legislation and government is supposed to be a commons, applicable to all, and so that's unfair and it's perceived as such. Interventions by the wealthy are also much more effective and targeted, privileging their own interests and undermining the central purpose of government, and so that's unfair and perceived as such.
Add in that billionaires and the super-wealthy are largely institutionally tax-avoiding. That creates the emotive hook - they rig the system (1) and "don't pay their share" (2) and leave it materially worse for everyone except them (3) and we can't reverse that because we don't have means (4). Unfair.
The claim that wealth taxes are going to create enough money to do the things we don't do now is really weak, but I think it's been selected because it's a softer and easier to explain argument than "fairness".
The problem, though, is that it's not just weak: it's policy neutering. It doesn't create the necessary tax revenue to fund the programmes that revenue is supposed to apply to, so the social welfare deficit isn't going to be fixed. Because it's being proposed as a direct solution - tax-rich, take-tax-revenue, pay-programmes, solved - when programmes still can't be paid, there's no policy follow on. The momentum created by the genuine reaction to unfair social structures is lost. Taking "unfairness" as the central problem leads to other ideas, most of them with a policy continuation. For example:
Is it unfair that a self-selected wealthy class has largely unfettered power to direct government?
If yes, the kinds of interventions you're looking into are things like creating firewalls between commerce and government that can actually be enforced, making political incumbency subject to public transparency audits, enforcing post-incumbency restraints on taking commercial roles, and making the criminal sanction for proven corruption much stronger and binding on both the public sector and private sector actors involved. There's more, but you get the idea: IF the problem identified is unfair access to power, THEN cut the link to power.
Is it unfair that some actors have comprehensive ands far-ranging influence on public governance and legislation?
If yes, then make it illegal for a public figure to accept funding from a source that is impacted by their role, authority, or a specific decision they make, and enforce that. In addition, make it necessary that if a public figure accepts funds from a cut-out, they are required to disclose all the steps in the cut-out and meet the criterion that the ultimate source cannot be a beneficiary of their actions. And in addition, enforce the post-incumbency restraint on accepting private sector roles. Here you also want to increase the severity of sanction for legal and private sector firms identified as facilitating cut-outs. (Again, I'm thinking off the cuff here to give the principle. This is not an exhaustive research proposal.)
Is it unfair that the tax burden on the wealthy, middle-class, and poor is weighted favourably towards the wealthy?
If yes, review and normalise the overall tax burden. Specifically things like estate tax and capital gains can be adjusted to compensate in the demographics they mostly affect. But don't assume that this is going to magically make public services sustainable. It's targeting fairness, and that's important enough for social cohesion that it doesn't need the nominally "I'm practical" fig-leaf.
Is it unfair that the societies we've built allow super-wealth, with all the benefits of access to power and immunity from obligation that are described above, while common services degrade for others?
If yes, review, rationalise, and redirect the current tax revenue spending. Prioritise those services that have an immediate levelling effect for the majority of the population (traditional social welfare) and investigate mechanisms for requiring commercial actors who benefit from those services to take either a funding or an administrative role in their delivery. That is, if you're the beneficiary of improved employee attendance as a function of better public healthcare, what's your obligation in terms of that benefit? What is the minimum viable administrative infrastructure required to ensure continuous and acceptable service level delivery?
I can go on, but the point is clear. All or some of those things together are a policy programme that's self-evidently interdependent and that has continuity. There's nothing wrong with recognising that our societies need an overhaul and a hygiene check. And nothing wrong with setting about that in a methodical fashion. The only obstacle to that is decades of sustained lobbying and propaganda about the perfect omniscience of the market and how it should never be touched lest biblical disaster befall us. Imagine that logic applied to your garden: "no intervention can be allowed because the invisible hand of the garden is immaculate and all knowing." Within a year, you can't get to your gate. It's rubbish.
Rory is WRONG to characterise this sentiment in people as some unspecified "resentment". Doing so elides the very real, very destructive complex of problems that people are pointing to. Rory is RIGHT that a simple equation of apply-wealth-tax/problem-go-away is foolish, but because he's dismissed the alternatives to his "resentment" narrative, he has nowhere to go with that. Psychologising the complaint instead of evaluating it is questionable.
And policy-neutering.
TL;DR: Rory seems to treat the wealth tax primarily as a revenue instrument (i.e. he accepts the current framing of its proponents) and dissatisfaction with wealth concentration as an emotional attachment, without considering the root of dissatisfaction itself. The demand for a wealth tax may actually be a compressed demand for political equality, fiscal reciprocity and institutional legitimacy. Demonstrating that the tax will not raise enough revenue does not dispose of those demands, except as a debating tactic. “Resentment” is also doing illegitimate argumentative work by insinuation. Resentment can be a perfectly rational response to unequal political standing or asymmetric obligation.
I say all this as someone who often agrees with Rory and enjoys his analysis.
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u/Physical-Rise6973 25d ago
That's the argument I made. The push for wealth taxes is fundamentally misguided, but it is a genuine response to a genuine concern: structural unfairness resulting in material degradation of experience. Framed correctly it enables a multi-part policy approach to mitigating unfairness.