As a species, humans need to compete with some expectation of success, and we have a natural need to be able to demonstrate our success to others – Inequality and differentiation are good.
However, as a society, it is unhealthy when wealth and resources are disproportionately controlled by a few. If people cannot succeed by competing within the framework of a system then the system must be changed. Sharing wealth reduces inequality - Socialism is good.
A global system should aim to resolve these competing demands by putting in place a lower bar, consisting of a global minimum wage and a social security service for the unemployed, aged and disabled so that all can live decent lives, and a top cap implemented by a wealth tax to prevent excess accumulation. Between these boundaries, competition should be encouraged to enable our competitive natures. The majority of people seem happy living ‘comfortable’ lives where basic needs can be acquired with some effort and where there is still some time and resources remaining to improve themselves and their surroundings.
The proposed wealth tax would promote competitive advantage by allowing individuals to accumulate up to £25M in assets, so that they can benefit their families and their inclinations (and can be seen to do so), and introduce a new tax, so that every year a 10% charge on assets over £25M would be put back into the wider system. Successful individuals can still accumulate beyond £25M, but this policy will reduce the ability to become untouchable princelings. It will also gradually reduce the ability of less successful generations benefiting from a single successful ancestor. It makes more resources available for competitive acquisition by breaking the stranglehold that oligarchs and the inherited elite have on wealth.
Standard income tax rules would also apply. Threshold and tax rate would be reviewed each year. Assets would include all property, shares, businesses, cars, planes, boats, art, and cash in all its forms at a point in the year.
Risk: Individuals will try to avoid the tax by masking ownership of assets, and denying applicability. Mitigation: Laws will have to be refined to ensure compliance and collection. Asset registers must be able to track through and assign ownership of all assets to individuals.
Risk: No Oligarch or Princeling is going to vote for this, and they can easily relocate. A wealth tax will be difficult to enforce until it can be implemented globally.
Risk: Wealthy investors reduce spending on risky business ventures. Mitigation: Tax incentives closely monitored to ensure it does not become a loophole.
Risk: Wealthy philanthropists reduce charitable donations. Mitigation: The global system should be responsible for funding social and infrastructure services, researching species specific global benefits and mitigating disaster events. Charities should also exist so people can fund their pet subject areas not covered by the state.
Supported by: Global Asset registers. Laws to be able to seize shares, cash, properties and sell them.