Category Archives: Taxes

Randy Wray: Forget Taxes for Redistribution – What to do About Inequality

Yves here. A lot of people argue for redistributive taxes, contending that they were very successful in the golden age of the American middle class, from the end of World War II through the Reagan era, in constraining the concentration of income and wealth at the top. However, that tax structure reflected a broad social consensus in favor of fostering prosperity for ordinary Americans, in no small measure to keep Communist impulses at bay.

In Yankee terms, Wray’s argument against using taxes to create a more egalitarian distribution of income is “You can’t get there from here”.

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Americans Raid 401(k)s, Replacing Home Equity Withdrawals as Way to Make Ends Meet

It’s been creepy to see economists and the financial media cheering the re-levering by American households as a sign that they economy is on the mend and consumers are regaining their will to shop. The number of Americans who are tapping into their 401 (k) accounts is proof that the financial health of ordinary Americans is far from robust.

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More Effective Remedies for Inequality

Yves here. The subject of inequality in income and wealth has, in the last year or so, become an oft-mentioned topic in economic and political commentary. It’s now even acceptable to use the word “oligarchy” to describe the US. Yet too often lost in the debate is that this type of inequality is the result of what right society allows various members to have. For instance, in the last 30 years, intellectual property laws have gotten stronger while the rights of workers to organize have been cut back.

We had a more equitable society when unions were stronger, taxes were more progressive, and anti-trust laws were enforced. This post by Geoff Davis serves as a reminder that there are remedies other than progressive taxation (which he regards as an after-the-fact remedy) to achieve that end.

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As Predicted, IRS Deems Bitcoin to be Property, Limiting Its Usefulness in Commercial Transactions

We told readers earlier this month that the IRS was well-nigh certain to deem Bitcoin to be property, not a currency, and that would deter its use in commerce. We got pushback from Bitcoin defenders, who tried several lines of argument, basically along the lines of “digital currencies are inevitable” and “the tax authorities are irrelevant”. Today, the IRS issued a release that states that it regards Bitcoin as tradeable property, which will make it cumbersome to use it in commercial transactions.

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