Most people think that our tax system follows Smith's principle of proportion. Manchin announced that he would not support the budget reconciliation bill without knowing more about its economic impact but encouraged members of Congress to vote for the bipartisan infrastructure bill. Joe Manchin (D-WV) talks to reporters at the U.S. Adam Smith, the founder of modern economics, stated in The Wealth of Nations that "The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate." This is about taxing individuals based on their ability to pay, and on their stake in the economy. But how do we answer Manchin's objection? Forget punishment. Three families have a combined wealth that increased by 5,868 percent, now totaling $348.7 billion.Ĭlearly, we need to rebalance towards positive stability. Twenty American individuals now have as much wealth as half the U.S. After the same period, the top 1 percent of families has $41 trillion in assets. Even after multiple economic expansions, the total net worth of the bottom 50 percent of Americans is 20 percent less than it was in 1990. From 2001 to 2016, middle-class families saw their median net worth shrink by 20 percent and working-class families lost 45 percent. Now, we have a growing glut of hoarded capital at the top, weakening middle-class balance sheets and ballooning working-class debt. Forty years later, the needs of the economy are different. In the early 1980s, trickle-down policies were enacted to increase the supply of investment capital. More favorable tax policies for working families would create a more productive economy, inspiring GDP growth rates and broad expansion of wealth. Earlier this month, Elon Musk showed his willingness to pay taxes on unrealized capital gains. Over 60 percent of Americans support policies that would make billionaires pay taxes that are more proportionate to their wealth. needs to leave behind trickle-down economics for "gush-up" economics. What is worse, trickle-down policies have made our economy top heavy-negatively stable, in engineering terms-and destined to crash.ĭ.C. is flying our political economy on autopilot, programmed on an outdated ideology of trickle-down economics. But this typical framing of taxation as punishment reveals that D.C.
Manchin has stated that he does not want to punish billionaires for their success, noting that they "bring a lot of jobs, invest a lot of money and give a lot to philanthropic pursuits." The senator is right to not want to punish creation of wealth by the working rich-building wealth through entrepreneurship and productive investment is vital. tax policy, this reluctance is inappropriate. Given the rising electoral impact of working families, and the present state of U.S. But these bills still face a major obstacle: reluctance on the part of Democratic senators Joe Manchin and Kyrsten Sinema, among others, to raise taxes on the wealthy.
In the weeks following significant Republican gains in Virginia and New Jersey, Democrats have rushed to pass President Joe Biden's Build Back Better and infrastructure plans.
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