Philanthropy or government benevolence?
The ownership of wealth, whether or not the income from that wealth is converted into a taxable income flow, may be converted into influence over social and political institutions. The primary way this happens is through the creation of non taxable foundations with charitable status. There are many such institutions that support a diverse range of activities. And the goals of the institutions are not goals that we would all support.
But:
Government is not a benevolent institution. It is an alternative form of power hierarchy in which the power of billionaires to influence our lives is replaced by the power of politicians. Whatever their rhetoric, and however superficially accountable they are through an imperfect electoral process, politicians are ultimately acting in their own interests.
Taxing Billionaires
By: Roger Farmer – University of Warwick
…or a different solution?
Big profits follow from big new ideas. That’s why federal science funding should be designed to include upside participation in the enterprises that will be created. The public deserves much more direct participation in those profits. And the billionaires should have to make do with fewer billions.
The Billionaire Problem
By: Simon Johnson – MIT
Not all billionaires are the same
Greg Mankiw argues that there are two types of billionaires: the spendthrifts and the frugal ones. The latter save most of their earnings and increase the economy’s capital stock. As a result, their savings reduce the return to capital and increase labor productivity and real wages. Shouldn’t then the spendthrift billionaires be taxed more then the frugal ones?
How to Increase Taxes on the Rich (If You Must)
By: Gregory Mankiw – Harvard University
