from the world's big
Would a wealth tax in America work? Yes, argues Berkeley economist Gabriel Zucman.
According to recent papers by Zucman, and his colleague Emmanuel Saez, one should be implemented.
- French economist, Gabriel Zucman, argues that a wealth tax needs to be implemented to level the economic playing field.
- Zucman helped both Bernie Sanders and Elizabeth Warren draft their wealth tax proposals.
- Zucman was also part of the discovered American billionaires now pay a lower tax rate than the middle class.
Though the last Democratic debate did not yield any revelations, the aftermath has been a focus on America's financial state, with discussions of a wealth tax (championed by Sen. Elizabeth Warren and Sen. Bernie Sanders) and universal basic income (championed by Andrew Yang) receiving the lion's share of attention.
Cue a handful of CEOs writing op-eds claiming that a wealth tax would never work.
Yet, we all know something is amiss. Pretending that billionaire tax cuts is the best path ahead for society is farcical. Between 1982 and 2018, the amount of U.S. wealth held by the richest 400 Americans grew by roughly $3 trillion. It's data provided by University of California, Berkeley, economists Emmanuel Saez and Gabriel Zucman — both of whom also vetted Warren's and Sanders's wealth tax plans.
In a paper published in September, the two economists revealed another facet of American tax reality that has since made headlines everywhere: for the first time in history, American billionaires pay a lower tax rate than the middle class. A large part of the problem is that while the lower classes are bombarded with sales and payroll taxes, the wealthiest pay no tax on the money they hold in bank accounts and investment funds.
One of the economist behind the Warren wealth tax explains the policy
For example, Warren Buffet famously repeats that he should be taxed more. As Zucman points out, Forbes estimates Buffet to be worth $60 billion. Yet he only claims $10 million in capital gains to the IRS. Buffet might claim to want more taxation, but according to Zucman his tax rate is functionally zero.
"Raising the rate on the $10 million that was accessible to the I.R.S. made no statistical difference at all. The issue was the $59,990,000,000 that they could not touch."
As Saez and Zucman point out in a recent NY Times article, each of the richest 400 Americans hold the same wealth as 1,308,440 fellow citizens. Since 1962, the tax rate of the bottom 50 percent of American workers has risen from 22.5 percent to 24.2 percent. Meanwhile, the rate for the top .01 percent has dropped from 53.6 percent to 29.4 percent. Even more stunningly is the rate of those 400 richest: from 54.4 percent to just 23 percent.
Meanwhile, the Trump reelection campaign has raised over $300 million for the next election.
Cutting taxes is not the work of Trump alone, though he is certainly enabling the process. Obama slashed corporate taxes, as did Bush before him. As Saez and Zucman write in the Times piece, this is not the way things must be, but a concerted effort to keep wealth concentrated:
"Tax avoidance, international tax competition and the race to the bottom that rage today are not laws of nature. They are policy choices, decisions we've collectively made — perhaps not consciously or explicitly, certainly not choices that were debated transparently and democratically — but choices nonetheless. And other, better choices are possible."
U.S. Senator Bernie Sanders is introduced by U.S. Senator Elizabeth Warren during a rally at the Orpheum Theatre in Boston on Mar. 31, 2017.
Photo by Barry Chin/The Boston Globe via Getty Images
In America, the average family income is $61,732. While not a luxurious life, families at that income bracket get by — often with debt and, sadly, losing more of the societal benefits once afforded to the middle class. Billionaires would still be able to live extraordinary lives with a higher tax percentage, lifestyles that few in this nation will ever attain. The only group that would argue the fact would be billionaires (and those enabling them for their own small slice).
Getting there will be another story. While Sanders is keen on arguing for the Northern European societies, Zucman has stated that Europe's wealth taxes are irrelevant to the United States: it is easy to move around the European continent to find more favorable tax laws, while those nations set the tax wealth bar too low, sometimes as low as $1 million.
Warren's plan doesn't kick in until $50 million while Sanders's starts at $32 million. They both actually fall on 2 percent at $50 million, Sanders just begins his a bit sooner with a 1 percent wealth tax. As Saez and Zucman argue, globalization is no excuse: nations can hold corporations — and therefore, the CEOs of those companies — accountable for the percentage of earned income in their country.
If Apple or Nestle earn 20 percent of their profits in the United States, they can be held accountable for paying a higher rate on that fifth of their yearly revenue. The same can be applied to assets of the wealthiest, not only their claimed annual earnings or capital gains.
Regardless of precedent, Zucman pushes back on the notion that Americans only care about efficiency and not equality:
"These things change a lot, and it's a very naive and historically wrong view. France used to be very unequal for a long time. It cares about equality, but the U.S. used to care even more and used to be even more equal than France."
To care, we have to pick out signal from noise. In a response to criticisms that his plans go "too far," in June, Zucman, along with Saez, responded, "They start from the premise that the rich cannot be taxed, to arrive at the conclusion that a tax on the rich would not collect much." Specifics might be argued over for some time to come, but the notion that collecting more taxes from the 1 percent would not help society is pure noise.
Collectively, we need to tune into the signal that noise is hiding.
Innovation in manufacturing has crawled since the 1950s. That's about to speed up.
Health officials in China reported that a man was infected with bubonic plague, the infectious disease that caused the Black Death.
- The case was reported in the city of Bayannur, which has issued a level-three plague prevention warning.
- Modern antibiotics can effectively treat bubonic plague, which spreads mainly by fleas.
- Chinese health officials are also monitoring a newly discovered type of swine flu that has the potential to develop into a pandemic virus.
Bacteria under microscope
needpix.com<p>Today, bubonic plague can be treated effectively with antibiotics.</p><p style="margin-left: 20px;">"Unlike in the 14th century, we now have an understanding of how this disease is transmitted," Dr. Shanthi Kappagoda, an infectious disease physician at Stanford Health Care, told <a href="https://www.healthline.com/health-news/seriously-dont-worry-about-the-plague#Heres-how-the-plague-spreads" target="_blank">Healthline</a>. "We know how to prevent it — avoid handling sick or dead animals in areas where there is transmission. We are also able to treat patients who are infected with effective antibiotics, and can give antibiotics to people who may have been exposed to the bacteria [and] prevent them [from] getting sick."</p>
This plague patient is displaying a swollen, ruptured inguinal lymph node, or buboe.
Centers for Disease Control and Prevention<p>Still, hundreds of people develop bubonic plague every year. In the U.S., a handful of cases occur annually, particularly in New Mexico, Arizona and Colorado, <a href="https://www.cdc.gov/plague/faq/index.html" target="_blank">where habitats allow the bacteria to spread more easily among wild rodent populations</a>. But these cases are very rare, mainly because you need to be in close contact with rodents in order to get infected. And though plague can spread from human to human, this <a href="https://www.healthline.com/health-news/seriously-dont-worry-about-the-plague#Heres-how-the-plague-spreads" target="_blank">only occurs with pneumonic plague</a>, and transmission is also rare.</p>
A new swine flu in China<p>Last week, researchers in China also reported another public health concern: a new virus that has "all the essential hallmarks" of a pandemic virus.<br></p><p>In a paper published in the <a href="https://www.pnas.org/content/early/2020/06/23/1921186117" target="_blank">Proceedings of the National Academy of Sciences</a>, researchers say the virus was discovered in pigs in China, and it descended from the H1N1 virus, commonly called "swine flu." That virus was able to transmit from human to human, and it killed an estimated 151,700 to 575,400 people worldwide from 2009 to 2010, according to the Centers for Disease Control and Prevention.</p>There's no evidence showing that the new virus can spread from person to person. But the researchers did find that 10 percent of swine workers had been infected by the virus, called G4 reassortant EA H1N1. This level of infectivity raises concerns, because it "greatly enhances the opportunity for virus adaptation in humans and raises concerns for the possible generation of pandemic viruses," the researchers wrote.
So far, 30 student teams have entered the Indy Autonomous Challenge, scheduled for October 2021.
- The Indy Autonomous Challenge will task student teams with developing self-driving software for race cars.
- The competition requires cars to complete 20 laps within 25 minutes, meaning cars would need to average about 110 mph.
- The organizers say they hope to advance the field of driverless cars and "inspire the next generation of STEM talent."
Indy Autonomous Challenge<p>Completing the race in 25 minutes means the cars will need to average about 110 miles per hour. So, while the race may end up being a bit slower than a typical Indy 500 competition, in which winners average speeds of over 160 mph, it's still set to be the fastest autonomous race featuring full-size cars.</p><p style="margin-left: 20px;">"There is no human redundancy there," Matt Peak, managing director for Energy Systems Network, a nonprofit that develops technology for the automation and energy sectors, told the <a href="https://www.post-gazette.com/business/tech-news/2020/06/01/Indy-Autonomous-Challenge-Indy-500-Indianapolis-Motor-Speedway-Ansys-Aptiv-self-driving-cars/stories/202005280137" target="_blank">Pittsburgh Post-Gazette</a>. "Either your car makes this happen or smash into the wall you go."</p>
Illustration of the Indy Autonomous Challenge
Indy Autonomous Challenge<p>The Indy Autonomous Challenge <a href="https://www.indyautonomouschallenge.com/rules" target="_blank">describes</a> itself as a "past-the-post" competition, which "refers to a binary, objective, measurable performance rather than a subjective evaluation, judgement, or recognition."</p><p>This competition design was inspired by the 2004 DARPA Grand Challenge, which tasked teams with developing driverless cars and sending them along a 150-mile route in Southern California for a chance to win $1 million. But that prize went unclaimed, because within a few hours after starting, all the vehicles had suffered some kind of critical failure.</p>
Indianapolis Motor Speedway
Indy Autonomous Challenge<p>One factor that could prevent a similar outcome in the upcoming race is the ability to test-run cars on a virtual racetrack. The simulation software company Ansys Inc. has already developed a model of the Indianapolis Motor Speedway on which teams will test their algorithms as part of a series of qualifying rounds.</p><p style="margin-left: 20px;">"We can create, with physics, multiple real-life scenarios that are reflective of the real world," Ansys President Ajei Gopal told <a href="https://www.wsj.com/articles/autonomous-vehicles-to-race-at-indianapolis-motor-speedway-11595237401?mod=e2tw" target="_blank">The Wall Street Journal</a>. "We can use that to train the AI, so it starts to come up to speed."</p><p>Still, the race could reveal that self-driving cars aren't quite ready to race at speeds of over 110 mph. After all, regular self-driving cars already face enough logistical and technical roadblocks, including <a href="https://www.bbc.com/news/technology-53349313#:~:text=Tesla%20will%20be%20able%20to,no%20driver%20input%2C%20he%20said." target="_blank">crumbling infrastructure, communication issues</a> and the <a href="https://bigthink.com/paul-ratner/would-you-ride-in-a-car-thats-programmed-to-kill-you" target="_self">fateful moral decisions driverless cars will have to make in split seconds</a>.</p>But the Indy Autonomous Challenge <a href="https://static1.squarespace.com/static/5da73021d0636f4ec706fa0a/t/5dc0680c41954d4ef41ec2b2/1572890638793/Indy+Autonomous+Challenge+Ruleset+-+v5NOV2019+%282%29.pdf" target="_blank">says</a> its main goal is to advance the industry, by challenging "students around the world to imagine, invent, and prove a new generation of automated vehicle (AV) software and inspire the next generation of STEM talent."
A new Harvard study finds that the language you use affects patient outcome.
- A study at Harvard's McLean Hospital claims that using the language of chemical imbalances worsens patient outcomes.
- Though psychiatry has largely abandoned DSM categories, professor Joseph E Davis writes that the field continues to strive for a "brain-based diagnostic system."
- Chemical explanations of mental health appear to benefit pharmaceutical companies far more than patients.
Challenging the Chemical Imbalance Theory of Mental Disorders: Robert Whitaker, Journalist<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="41699c8c2cb2aee9271a36646e0bee7d"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/-8BDC7i8Yyw?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>This is a far cry from Howard Rusk's 1947 NY Times editorial calling for mental healt</p><p>h disorders to be treated similarly to physical disease (such as diabetes and cancer). This mindset—not attributable to Rusk alone; he was merely relaying the psychiatric currency of the time—has dominated the field for decades: mental anguish is a genetic and/or chemical-deficiency disorder that must be treated pharmacologically.</p><p>Even as psychiatry untethered from DSM categories, the field still used chemistry to validate its existence. Psychotherapy, arguably the most efficient means for managing much of our anxiety and depression, is time- and labor-intensive. Counseling requires an empathetic and wizened ear to guide the patient to do the work. Ingesting a pill to do that work for you is more seductive, and easier. As Davis writes, even though the industry abandoned the DSM, it continues to strive for a "brain-based diagnostic system." </p><p>That language has infiltrated public consciousness. The team at McLean surveyed 279 patients seeking acute treatment for depression. As they note, the causes of psychological distress have constantly shifted over the millennia: humoral imbalance in the ancient world; spiritual possession in medieval times; early childhood experiences around the time of Freud; maladaptive thought patterns dominant in the latter half of last century. While the team found that psychosocial explanations remain popular, biogenetic explanations (such as the chemical imbalance theory) are becoming more prominent. </p><p>Interestingly, the 80 people Davis interviewed for his book predominantly relied on biogenetic explanations. Instead of doctors diagnosing patients, as you might expect, they increasingly serve to confirm what patients come in suspecting. Patients arrive at medical offices confident in their self-diagnoses. They believe a pill is the best course of treatment, largely because they saw an advertisement or listened to a friend. Doctors too often oblige without further curiosity as to the reasons for their distress. </p>
Image: Illustration Forest / Shutterstock<p>While medicalizing mental health softens the stigma of depression—if a disorder is inheritable, it was never really your fault—it also disempowers the patient. The team at McLean writes,</p><p style="margin-left: 20px;">"More recent studies indicate that participants who are told that their depression is caused by a chemical imbalance or genetic abnormality expect to have depression for a longer period, report more depressive symptoms, and feel they have less control over their negative emotions."</p><p>Davis points out the language used by direct-to-consumer advertising prevalent in America. Doctors, media, and advertising agencies converge around common messages, such as everyday blues is a "real medical condition," everyone is susceptible to clinical depression, and drugs correct underlying somatic conditions that you never consciously control. He continues,</p><p style="margin-left: 20px;">"Your inner life and evaluative stance are of marginal, if any, relevance; counseling or psychotherapy aimed at self-insight would serve little purpose." </p><p>The McLean team discovered a similar phenomenon: patients expect little from psychotherapy and a lot from pills. When depression is treated as the result of an internal and immutable essence instead of environmental conditions, behavioral changes are not expected to make much difference. Chemistry rules the popular imagination.</p>