Piketty’s simple plan: tax people who aren’t like Piketty

Thomas Piketty’s Capital in the Twenty-First Century is mostly about wealth inequality within countries, but takes an international approach to taxation due to the fact that people are able to invest internationally. A small portion of the book, however, concerns inequality considered globally.

Consider citizens of France, fortunate to be born into a country with fertile soil and ample fresh water. Working a legal maximum of 35 hours a week, thanks to these abundant natural resources, the French are able to enjoy the world’s best fruit and other agricultural products. Could a program of global wealth redistribution start with a special (“exceptional”) tax on French people that would be paid to Earth residents living in arid countries and suffering from a diet of week-old produce that has been shipped in? Apparently not, according to Piketty.

Or how about just look at countries sorted by per-capita GDP and tax those in the richest 30 to support folks in the bottom 150+? That would mean a tax on Thomas Piketty and his friends due to the fact that France comes in at #22 (IMF list). Capital in the Twenty-First Century does not propose this as a good idea.

What would be a good idea, however, is a tax on people in oil-rich countries (i.e., not France):

When it comes to regulating global capitalism and the inequalities it generates, the geographic distribution of natural resources and especially of “petroleum rents” constitutes a special problem. International inequalities of wealth—and national destinies—are determined by the way borders were drawn, in many cases quite arbitrarily. If the world were a single global democratic community, an ideal capital tax would redistribute petroleum rents in an equitable manner.

It is not up to me to calculate the optimal schedule for the tax on petroleum capital that would ideally exist in a global political community based on social justice and utility, or even in a Middle Eastern political community. I observe simply that the unequal distribution of wealth in this region has attained unprecedented levels of injustice, which would surely have ceased to exist long ago were it not for foreign military protection. In 2012, the total budget of the Egyptian ministry of education for all primary, middle, and secondary schools and universities in a country of 85 million was less than $5 billion.45 A few hundred kilometers to the east, Saudi Arabia and its 20 million citizens enjoyed oil revenues of $300 billion, while Qatar and its 300,000 Qataris take in more than $100 billion annually.

Piketty does not explain why when the Qataris were poor nobody felt an urgent need to help them out, but now that the Qataris are rich they should be taxed to help those who previously ignored them.

4 Comments

  1. Jeffrey Friedl

    June 5, 2014 @ 11:38 pm

    1

    Broadly speaking there are two approaches to designing taxes. One is to take a wide-view approach and design what’s “right” without regard to how you personally might be affected, because if it’s “right”, you can rest assured that how it effects you will be “right”.

    No one does that. The other way, that essentially everyone does, can be summarized simply as “take other people’s money”.

    So a review about a book on designing taxes that says to take from others instead of the author, well, it’s hardly surprising.

  2. Karen Zukor

    June 6, 2014 @ 11:20 am

    2

    Berkeley, California fruit is better than French fruit in general. (I have spent 8 summers + one full year in France buying fruit in supermarkets, farmer’s markets, and you-pick farms. The rest of the last 15 years has been spent buying fruit in at supermarkets and farmer’s markets Berkeley.)

  3. Izzie L.

    June 6, 2014 @ 1:15 pm

    3

    As Jeffrey said and as I have said before, generally speaking intellectuals are in favor of taxing “the rich” and “rich” is always defined as someone who is making more than you are, as a college professor or whatever.

    Regarding the produce in France, first of all France has terrific PR in that most of the country borders upon or is just across the Channel from dreary England, rainy Belgium, chilly northern Germany, etc. but the France of our imagination is always warm and sunny. 2nd the French food system has become increasingly industrialized – McDonalds is one of the most popular restaurants and many supposedly high end restaurants are really serving reheated frozen food prepared in large food processing plants. And the French are behind the US in creating a new generation locavore hipster type food culture. So again, the France of the mind is different than the reality.

  4. jsc

    June 6, 2014 @ 4:20 pm

    4

    > Could a program of global wealth redistribution start with a special
    > (“exceptional”) tax on French people that would be paid to Earth residents
    > living in arid countries and suffering from a diet of week-old produce that
    > has been shipped in?

    Currently this is the opposite: France is the biggest beneficiary of the agricultural subsidies from the European Union under the “Common Agricultural Policy” !

    http://en.wikipedia.org/wiki/Common_Agricultural_Policy

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