@Tim Worstall
As a matter of equity we do want the rich bastards to be paying more as a proportion of income. Even Adam Smith was sound here.
The central problem with this is everyone is someone elses "Rich bastard". I used to think an annual income over the national average made one rich, or owning a house outright, or having a decent pension. It doesn't. So define rich and we know where we're starting from, but without that definition, nobody can ever agree other than to say rich means richer than themselves.
Start with land taxation, add on any Pigou Taxes we want (carbon, baccy, booze, pollution etc, we want these precisely because they do destroy certain economic activity), as much VAT as we can get away with and if we still need more to feed the ravening maw of government, income taxes and on up the list.
2 main issues here. Firstly, feeding "the ravening maw of government" is the main problem. Government is not efficient and it is trying to do too much. Were it efficient and focussed, we would only need to collect about a third of the level of taxes we currently do. So the next definition we need before we can begin is to define what we need the government to do.
The second issue with this point, is land value tax. The principle thing destroyed by implementing this is land value. Sure, it's great, if your primary motivator is to reset the landed gentry. For literally anything else, it sucks, because it's too easy to avoid. Just sell the land. What you end up with is land values dropping to the point where the tax on them becomes negligible, and you now have dirt cheap land, but government has a major funding problem.
Thomas Piketty is advocating tax rates of 80 per cent on incomes at the top end, and of 1-3 per cent on wealth annually, knowing very well that these entirely fail the efficiency and efficacy tests.
At best this would induce capital flight to more sensible regions. At worst it would cripple the economy as the wealth generators and educated and mobile workers leave for somewhere less hostile. Piketty's main issue is that he started with his conclusion, and then did enough research and thought to prove that. Not at allt he scientific method, nor even a truly academic one. What it was, was politics dressed up as economics, and nothing more.
Biting the hand that feeds IT
