People in wealthy countries want higher taxes on the rich, more welfare

Tuesday, Reuters released the results of a survey of 21 countries which found a majority of people want more taxes on the rich to pay for more welfare:

In all of the 21 countries surveyed, more than half of those people polled said they were in favour when asked: “Should the government tax the rich more than they currently do in order to support the poor?” The OECD gave no definition of rich…

Support was highest in Portugal and Greece, both emerging from years of economic crisis, at nearly 80 percent compared with an average of 68 percent, the Organisation for Economic Cooperation and Development said.

In light of the high level of discontent, a majority of people wanted their government to do more in all countries except France and Denmark, whose welfare systems are among the most generous in the world.

Euronews has some additional detail on the results:

In France, where the “Gilets Jaunes (Yellow Vests)” movement — now in its 19th week — criticised the government’s decision to scrap a tax on high-earners, over 60% of respondents favoured taxing the rich more.

Meanwhile, an average of about 60% of respondents across the 21 countries polled believe they are not receiving their fair share of public benefits given the taxes and social contributions they pay and over 70% agree with the statement: “Many people receive public benefits without deserving them.”…

Stefano Scarpetta, the OECD’s director of employment, labour and social affairs, described the results as “deeply worrying” and highlighted that OECD countries on average spend more than 20% of GDP on social policies, or the equivalent of roughly $8,000 (€7,050) per person per year.

So in relatively well-off countries, people believe a) the rich aren’t paying enough and b) people like me aren’t getting enough benefits. All that’s needed is a political framework that ties these together and promises to deliver what people want (or better yet, what they deserve). It’s a field ripe for socialists willing to promise voters the moon by taxing someone else to pay for it. And, as it happens we have a lot of them doing just that here in the U.S. Vox put together this list of tax proposals yesterday:

  • Rep. Alexandria Ocasio-Cortez (D-NY) suggested a top rate of 70 percent on incomes over $10 million, which would actually be somewhat below prevailing rates under Dwight Eisenhower, and around where top rates were from Lyndon Johnson to Jimmy Carter.
  • Warren’s plan would set up a progressive wealth tax, with a normal rate of 2 percent on wealth over $50 million and a top rate of 3 percent on wealth over $1 billion. That might sound small, but because it’s levied on wealth, not income, and every year rather than at death, it could wind up hitting billionaires harder than high income or estate taxes.
  • Sanders’s plan would raise the top estate tax rate to 77 percent. That’s the same top rate that existed from 1941 to 1976; this is higher than the 65 percent top rate he proposed in the 2016 race.
  • Sen. Cory Booker (D-NJ) has proposed a 65 percent estate tax rate (higher than at any point since 1982), a higher capital gains tax rate, and applying capital gains taxes to assets held at death, all to pay for his baby bonds bill.
  • Rep. Jan Schakowsky (D-IL), a lefty House Democrat who’s been proposing a top income tax rate of 49 percent since at least 2011, says she’s working with Ocasio-Cortez to formulate a new bill that might feature even higher top rates.
  • And if Sanders excitedly releasing his estate tax plan after Warren’s wealth tax proposal is any indication, the 2020 race will involve a leftward arms race as candidates attempting to court voters worried about income inequality try to one-up each other’s plans to tax the rich.

The problem, of course, is that these feelings that someone isn’t paying enough and I’m not getting enough won’t be satisfied with any sort of marginal increase in taxes or spending. The U.S. would have a long way to go to catch up with the spending in Europe and, as you can see, most Europeans aren’t satisfied either. France, where people apparently do think the government is doing enough, has been attempting to reform some of its labor laws after years of low-to-no growth but has been facing opposition to those changes from those who benefit. At the same time, the country is being torn apart over new tax proposals that people don’t want to pay.

What people want is to have their cake and eat it too. The responsible thing, the right thing would be to tell them it doesn’t worth that way. The rich don’t have enough money to pay for everything that everyone else feels they are owed, not even if we took 100% of their wealth tomorrow. But we’re having a socialist moment here in the U.S. and the message being sent out is almost the opposite. As socialist Mayor de Blasio keeps saying, “there’s plenty of money in the world…it’s just in the wrong hands.”