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, as the few then control a higher proportion of the available work, and so influence the direction of the species to suit themselves.
If people cannot succeed by competing within the framework of a system, then the system must be changed, or people will compete outside the system or compete against the system. 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 place a top cap implemented by a wealth tax to reduce excess accumulation. Between these boundaries, competition should be encouraged to enable our competitive natures.
The proposed wealth tax would promote competitive advantage by allowing individuals to accumulate up to a specified threshold with no wealth taxes applied, and then apply a wealth tax to accumulations above the threshold. The threshold needs to be high, say £25M in assets (2020 value), so that people can benefit their families and their inclinations, can be seen to do so, and to encourage ‘levelling up’. The new wealth tax would apply a 10% charge on assets over the threshold to be put back into the wider system. Successful individuals can still accumulate beyond the threshold, 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 and assets.
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. Charitable and philanthropic organisations should also exist so people can fund their pet subject areas not covered by the state.