According to economist Thomas Piketty, the debate over whether it's better to raise or lower taxes is pointless if a government does not invest in growth and infrastructure.
Political debates about taxes often revolve around a simple question: Should they be higher or should they be lower? Economist Thomas Piketty argues that this conversation draws the spotlight away from a much more important topic: How do you spend taxes once you've collected them? Poorer European countries like Romania and Bulgaria, which have relatively low tax rates, do not necessarily struggle because their governments don't tax enough. Likewise, Sweden and Denmark are not successful states merely because the tax rate is 50 percent of GDP or higher. What sets these nations apart are the values which inform their tax spending. Sweden and Denmark thrive because they invest so much in education, public infrastructure, and other building blocks for growth and prosperity.
Economist Thomas Piketty delves into several common misconceptions about free market economics and argues that strong public institutions are necessary for market regulation.
In this Big Think interview, economist Thomas Piketty delves into several common misconceptions about free market economics. Piketty argues that strong public institutions are necessary for market regulation. So-called "natural forces" of self-regulation commonly associated with the writings of Adam Smith cannot be relied on to maintain a healthy economic climate. An example of this is the heavy trend toward deregulation that spurred the 2007/2008 financial crisis. Piketty warns that the tepid regulatory response to the Great Recession could very well come back to bite us.
Higher and more equitable growth in the United States requires more public support for higher education, argues economist and best-selling author Thomas Piketty.
Higher and more equitable growth in the United States requires more public support for higher education, argues economist and best-selling author Thomas Piketty. Changes are necessary for the stark reality of higher education to match the purported American values of meritocracy, hard work, and equal opportunity/mobility. If we really want to promote these things, says Piketty, we need to do something about student debt.
Thomas Piketty is Professor of Economics at the Paris School of Economics and author of the landmark 2013 book Capital in the Twenty-First Century. He is the author of numerous articles published in journals such as the Quarterly Journal of Economics, the Journal of Political Economy, the American Economic Review and the Review of Economic Studies, and of a dozen books. He has done major historical and theoretical work on the interplay between economic development and the distribution of income and wealth. In particular, he is the initiator of the recent literature on the long run evolution of top income shares in national income (now available in the World Top Incomes Database). These works have led to radically question the optimistic relationship between development and inequality posited by Kuznets, and to emphasize the role of political and fiscal institutions in the historical evolution of income and wealth distribution.