We, the People, call Thomas Piketty to testify on “Capital in the Twenty-First Century”
Piketty: “The central thesis of this book is..an apparently small gap between the return on capital and the rate of growth can in the long run have powerful and destabilizing effects on the structure and dynamics of social inequality”
Piketty: The argument that the new information economy will allow talented individuals to increase their productivity many times is “often used to justify extreme inequalities and to defend the privileges of the winners without much consideration for the losers, much less the facts..” and without effort to verify this..”
Piketty: “..the first crucial fact to bear in mind is that inflation is largely a twentieth-century phenomenon.”
Piketty: “..the revival of private wealth is partly due to the privatization of national wealth.”
Piketty: “Between 1987 and 2013, the number of $ billionaires rose according to Forbes from 140 to l,400, and their totsl wealth rose from 300 to 5,400 billion dollars.”
Piketty: “Another important point is..wealthy people are constantly coming up with new and ever more sophisticated legal structures to house their fortunes. Trust funds, foundations, and the like often serve to avoid taxes..”
Piketty: “..the revival of private wealth is partly due to the privatization of national wealth.”
Piketty: “One characteristic of today’s financial globalization is that every country is to a large extent owned by other countries, which not only distorts perceptions of..global distribution of wealth but also represents an important vulnerability for smaller countries as well as a source of instability in the global distribution of net positions.”
Piketty: A 2011 Federal Reserve study showed “..the top decile own[ed] 72% of America’s wealth, while the bottom half claim just 2%.” Which may be an underestimation of the largest fortunes.
Piketty: “The inescapable reality is this: wealth is so concentrated that a large segment of society is virtually unaware of its existence.”
Piketty: “..the growth of a true “propertied middle class” was the principle structural transformation of the distribution of wealth in..developed countries in the 20th century…The rise of a propertied middle class was accompanied by a very sharp decline in the wealth of the upper centile..”
Piketty: ” since 1980..income inequality has exploded in the United States..”
Piketty: “..there is absolutely no doubt..the increase of inequality in the United States contributed to the nation’s financial instability..one consequence of increasing inequality was virtual stagnation of the purchasing power of the lower and middle classes..which inevitably made it more likely..modest households would take on debt, especially since unscrupulous banks and financial intermediaries, freed from regulation and eager to earn good yields on..enormous savings injected into the system by the well-to-do, offered credit on increasingly generous terms.”
Piketty: A study of 1977-2007 U.S. economic growth, “we find..the richest 10% appropriated three-quarters..the richest 1% alone absorbed nearly 60%..It is hard to imagine an economy and society that can continue functioning indefinitely with such extreme divergence between social groups..”
Piketty: “Goldin and Katz have no doubt..increased wage inequality in the United States is due to a failure to invest sufficiently in higher education. More precisely, too many people failed to receive the necessary training..because families could not afford the high cost of tuition.” In contrast to educational policies in the Scandinavian nations.
Piketty: The U.S. minimum wage reached its peak purchasing power in 1969. It was frozen by Republican presidents Reagan, H.W. Bush and G.W. Bush.
Piketty; “In practice, the invisible hand does not exist, any more than “pure and perfect” competition does..”
Piketty: “..the decrease in the top marginal income tax rate led to an explosion of very high incomes, which then increased the political influence of the beneficiaries of the change in tax laws, who had an interest in keeping the top rate low or even decreasing them further and who could use their windfall to finance political parties, pressure groups, and think tanks.”
Piketty: “..one can show that an effective tax rate of 30%, if applied to all forms of capital, can by itself account for a very significant deconcentration of wealth..”
Piketty” In France, 1945-75, “there was a fundamental unity to this society, in which everyone participated in the communion of labor and honored the meritocratic ideal. People believed..arbitrary inequalities of inherited wealth were a thing of the past.” For people born in the 1970s, “and even more for those born later, things are quite different.”
Piketty: “..democratic societies rest on a meritocratic worldview, or at any rate a meritocratic hope..in a democracy, the professed equality of rights of all citizens contrasts sharply with the very real inequality of living conditions.”
PIKetty: There is a danger of “an oligarchic type of diverge..a process in which rich countries would come to be owned by their own billionaires or, more generally, in which all countries..would come to be owned more and more by the planet’s billionaires and multimillionaires…This process is already well under way..”
Piketty: “..the recent rise of tax competition in a world of free-flowing capital has led many governments to exempt capital income from the progressive income tax…The result is an endless race to the bottom, leading to cuts in corporate tax rates and to..exemption of interest, dividends, and other financial revenues from the taxes to which labor incomes are subject.”
Piketty; “THe progressive tax is..a relatively liberal method for reducing inequality, in the sense..free competition and private property are respected while private incentives are modified in potentially radical ways, but always according to rules thrashed out in democratic debate. the progressive tax thus represents an ideal compromise between social justice and individual freedom.”
Piketty: Between 1932 and 1980, the top U.S. federal income tax averaged 81%, and the top estate was between 70% and 80%.
Piketty: Two phenomena that are “perfectly correlated: the countries with the largest decreases in their top tax rates are also the countries where the top earners’ share of national income has increased the most..”
Piketty” “The evidence suggests..a rate..of 80% on incomes over $500,000 or $1 million a year not only would not reduce the growth of the U.S. economy but would in fact distribute the fruits of the growth more widely while imposing reasonable limits on economically useless [or even harmful] behavior.””
Piketty. “..if democracy is to regain control over the globalized financial capitalism..it must invent new tools…The ideal would be a global tax on capital, coupled with a very high level of international financial transparency.
Piketty: Russia adopted a flat tax in the 1990s
Piketty: “The overall conclusion..is that a market economy based on private property, if left to itself, contains powerful forces of convergence…but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based.”
[Note: please review what Piketty says. He based his statements on facts, graphs of which are posted throughout. Hr studies 200 years of tax and income material, from many nations. The choice is simple: we either return to the 1932-1980 tax rates – top rates of about 81%, plus high estate tax rates [70-80%], or we sentence OURSELVES and OUR CHILDREN AND GRANDCHILDREN to a feudal nightmare – an oligopoly of wealth. The evidence is right there: the peak middle class era of 1947-73. – vs. the post-1980 “Reagan Revolution” of ever increasing income/wealth inequality. As others have DOCUMENTED, the “American Dream” has been deliberately stolen – by the rich, thanks to in good part “campaign contributions” by Republican-dominated “Supreme Courts” [Buckley, Bellotti, Citizens United – which “legalized” bribery of government officials through use of “lobbyists” and “Pacs”] If YOU do nothing, it will get worse.}
Piketty: “The problem is simply that the entrepreneurial argument cannot justify all inequalities of wealth, no matter how extreme…fortunes can grow and perpetuate themselves beyond all reasonable limits and beyond any possible rational justification in terms of social utility.
Piketty: “Another important point is hat wealthy people are constantly coming up with new and ever more sophisticated legal structures to house their fortunes. Trust funds, foundations, and the like often serve to avoid taxes..”
Piketty: “The inescapable reality is this: wealth is so concentrated that a large segment of society is virtually unaware fo its existence..”
Piketty: “..the growth of a true “propertied middle class’ was the principle structural transformation of the distribution of wealth in..developed countries in the twentieth century.. TXhe rise of a propertied middle class was accompanied by a vey sharp decline in the wealth of the upper centile.”
Piketty: “Since 1980..income inequality has exploded in the United States..”
Piketty: “..there is absolutely no doubt..the increase of inequality in the United States contributed to the nation’s financial instability..one consequence of increasing inequality was virtual stagnation of the purchasing power of the lower and middle classes..which inevitably made it ore likely..modest households would take on debt, especially since unscrupulous banks and financial intermediaries, freed from regulation and eager to earn good yields on..enormous savings injected into the system by the well-to-do, offered credit on increasingly generous terms.”
Piketty; In a study of 1977-2007 U.S. economic growth, “we find..the richest 10 percent appropriated three-quarters..the richest l
With Justice For All 