Wealth inequality doesn't have any direct effects - merely having more money than someone else doesn't do anything. It's only after the money gets spent that you see negative effects, and the magnitude and type of spending determine the effects. It's more accurate to call this "spending inequality".
This proposal doesn't address the problem because it doesn't affect spending - only wealth. (a capital gains tax is actually a deceitfully name wealth tax) Wealth doesn't do anything until it's spent. That's the main problem with this proposal - it doesn't even try to address the problem it pretends to address.
As to how to actually address the problem: there's two types of wealth inequality that most people are concerned about - that between the super-rich and everyone else (discussed here), and that between the poor and everyone else (not discussed).
Thank you for engaging honestly, it's a breath of fresh air in this thread.
The ~wealth~ spending inequality problems of the super-rich seem to be mainly manifested in corruption - donating large amounts to political groups, and lobbying. You want to regulate/outlaw those specific things.
However, aside from corruption (which is a huge problem) most of the spending inequality problems seem to come from the middle and lower class. For instance, cost of housing and living - I think that that's being driven by the middle class having more access to capital in a supply-constrained environment (which is partially caused by big hedge funds buying up housing to rent it out - which again is a separate problem that can be addressed separately and isn't fixed by the capital gains tax). People like Zuckerberg aren't personally buying up housing all over the US on their own - this problem isn't at their level and this tax wouldn't help.
You can't outlaw the exercise of power, so the extreme power imbalance itself is the core problem for humanity; and the only way to fix that is to take some of their power away.
> donating large amounts to political groups, and lobbying
Those are indeed ways of exercising power that can be outlawed, but there are other ways of exercising power that are impossible to outlaw. For example, the ultra-rich can spend far more money on lawyers than anyone else. How are you going to outlaw that? And even the charitable contributions of the ultra-rich are controversial and probably wouldn't happen in a true democracy. E.g., the Bill Gates foundation has a lot of influence on global health spending[1]:
>
If you look across global health, they’re funding everybody. Nobody is more than one degree removed from the Gates Foundation. So it’s really difficult to avoid the foundation’s money.
Basically they wield so much power that even their charitable contributions to society are inherently political, unlike say if I volunteer at my local rescue mission.
Prologue: To be clear, I absolutely agree that rich people have disproportionate power in our economic system due to their wealth, but taking away that wealth is simultaneously (1) evil (according to every self-consistent non-arbitrary moral system I've seen - if you have another, I'd love to hear it) and authoritarian and (2) completely unnecessary - you don't need to tax people in order to get rid of these behaviors, and it completely misses the underlying problems that are present for all economic strata.
> You can't outlaw the exercise of power, so the extreme power imbalance itself is the core problem for humanity; and the only way to fix that is to take some of their power away.
This is not the only fix. It is possible to outlaw specific exercises of power that actually harm people, such as lobbying and bribery, without taking any money away at all, and it's possible to level the playing field in other areas such that money is much less of an advantage.
> For example, the ultra-rich can spend far more money on lawyers than anyone else.
By simplifying the legal system, and removing barriers to entry in the legal profession, such that people can effectively self-represent, both because they're legally allowed to, and because the legal system is simple enough that individuals can comprehend it and argue effectively. (this will also greatly reduce the effectiveness of high-powered lawyers, because the simpler the system is, the less advantage the best lawyers have over the worst ones)
The legal system is inherently flawed in that richer people have a massive advantage over poorer people - that is the problem, not that some people have more money and so can take advantage of it.
Please, seriously, think about that for a bit - our economy is filled with systems that are unfair or exploitative (e.g. legal, healthcare, non-compete agreements, the rent collusion that's currently happening), but the solution is not to start taxing the ultra-rich, because that still leaves those systems in an exploitative state, and they'll continue to take advantage of the middle and lower class even if you eliminate all of the rich people.
> E.g., the Bill Gates foundation has a lot of influence on global health spending
This is also very feasible to fix - make the status of being a tax-deductible charity contingent on not doing the bad things you want to disincentivize. This is similar to how Title IX is a huge lever over public institutions that prohibits them from doing some bad things.
Wealth inequality doesn't have any direct effects - merely having more money than someone else doesn't do anything. It's only after the money gets spent that you see negative effects, and the magnitude and type of spending determine the effects. It's more accurate to call this "spending inequality".
This proposal doesn't address the problem because it doesn't affect spending - only wealth. (a capital gains tax is actually a deceitfully name wealth tax) Wealth doesn't do anything until it's spent. That's the main problem with this proposal - it doesn't even try to address the problem it pretends to address.
As to how to actually address the problem: there's two types of wealth inequality that most people are concerned about - that between the super-rich and everyone else (discussed here), and that between the poor and everyone else (not discussed).
Thank you for engaging honestly, it's a breath of fresh air in this thread.
The ~wealth~ spending inequality problems of the super-rich seem to be mainly manifested in corruption - donating large amounts to political groups, and lobbying. You want to regulate/outlaw those specific things.
However, aside from corruption (which is a huge problem) most of the spending inequality problems seem to come from the middle and lower class. For instance, cost of housing and living - I think that that's being driven by the middle class having more access to capital in a supply-constrained environment (which is partially caused by big hedge funds buying up housing to rent it out - which again is a separate problem that can be addressed separately and isn't fixed by the capital gains tax). People like Zuckerberg aren't personally buying up housing all over the US on their own - this problem isn't at their level and this tax wouldn't help.