An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Saturday, May 23, 2020
If the rich knew what tax was for they might actually appreciate it… — Peter May
Good article, but how much does taxing the rich control inflation? I would think the everyday transactions of the 99% dwarf the transactions of the wealthy, who mostly puts their wealth into the stock market (driving it up of course). I wouldn't think that the price of the assets in the stock market would have much to do with the price of milk or blue jeans, except verrry indirectly. Even when we had the housing bubbling distorting all sorts of things, it relied on a non-wealthy sucker taking out a bigger mortgage than they could handle (driving up the house prices, which I'm sure generated more spending elsewhere).
but how much does taxing the rich control inflation? Joe
Good point Joe and a dirty little secret of MMT is that taxation to control price inflation MUST fall on the non-rich since the rich don't consume enough to matter.
A related question for the rich is, do they want to ensure viable markets and a ready supply of labor power?
The imposition of taxes motivates the formation of markets for output specifically priced in the national money of account. This is true whether a country has its own currency or adopts another. By imposing taxes in the chosen money of account, and assessing income and wealth in that money of account, most people need to supply goods or services priced in that money of account to meet tax obligations. Taxes drive markets in a particular money of account.
A question for the rest of us is, do we want any say in the conditions under which we gain access to goods and services and sell our labor power to employers?
Without basic worker and consumer protections. the system is entirely slanted against the majority, resulting in a race to the bottom, and ultimately a demise of civilization.
Good article, but how much does taxing the rich control inflation? I would think the everyday transactions of the 99% dwarf the transactions of the wealthy, who mostly puts their wealth into the stock market (driving it up of course). I wouldn't think that the price of the assets in the stock market would have much to do with the price of milk or blue jeans, except verrry indirectly.
ReplyDeleteEven when we had the housing bubbling distorting all sorts of things, it relied on a non-wealthy sucker taking out a bigger mortgage than they could handle (driving up the house prices, which I'm sure generated more spending elsewhere).
but how much does taxing the rich control inflation? Joe
ReplyDeleteGood point Joe and a dirty little secret of MMT is that taxation to control price inflation MUST fall on the non-rich since the rich don't consume enough to matter.
A related question for the rich is, do they want to ensure viable markets and a ready supply of labor power?
ReplyDeleteThe imposition of taxes motivates the formation of markets for output specifically priced in the national money of account. This is true whether a country has its own currency or adopts another. By imposing taxes in the chosen money of account, and assessing income and wealth in that money of account, most people need to supply goods or services priced in that money of account to meet tax obligations. Taxes drive markets in a particular money of account.
A question for the rest of us is, do we want any say in the conditions under which we gain access to goods and services and sell our labor power to employers?
Without basic worker and consumer protections. the system is entirely slanted against the majority, resulting in a race to the bottom, and ultimately a demise of civilization.