America is on a path towards a level of both wealth and income inequality unparalleled in recorded history. Thomas Piketty’s Capital in the Twenty-First Century summarizes and conveys the work of Piketty and many co-authors, over many decades, looking at the structure of income and wealth inequality across many nations and centuries. This review essay builds on Piketty’s ambitions as well as his data, in order to put forth a better solution: one that accepts and even embraces the facts of unequal ownership of capital, but changes the social meaning of those facts to avoid the social harms that follow from unfettered private party capitalism. A progressive spending tax does not simply take capital away from the wealthy. It allows the rich to keep and manage their wealth, as they have shown the ability and temperament to do so. But it curtails their ability to spend their capital on themselves and their luxurious wants. The social distinction of holding wealth can continue; the progressive spending tax makes this state of affairs work to the common utility.
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Date of this Version
Edward J. McCaffery, "The Meaning of Capital in the Twenty-First Century" (March 2016). University of Southern California Legal Studies Working Paper Series. Working Paper 203.
Accounting Law Commons, Banking and Finance Law Commons, Law and Economics Commons, Securities Law Commons, Taxation-Federal Commons, Taxation-State and Local Commons, Taxation-Transnational Commons, Tax Law Commons