Had an interesting discussion on the phone with my father last night.
The question isn’t one of company’s having large amounts of wealth (since it is usually re-invested) but rather one of an individuals exorbitant fortunes (personal wealth) and the sway they may or may not exert on the market. Individuals such as George Soros and Warren Buffett who would purport themselves as adhering to a “socialistic” agenda can on a whim or for shits and giggles mess with the livelihood of many millions of people.
How much money does an individual truly need? It isn’t about curtailing an individuals freedom to make a decent living and get rich doing it but rather the impracticality of imbalance that arises in the case of wealth accumulating in a few concentrated areas. What is the common good? What is the equilibrium?
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What this pertains to is that it is relevant in understanding and equating the monopoly/monopsony relationship to that of what a single individual in possession of what some would call an “exorbitant” amount of funds can do to the market. Will they act for perceived good or evil?
One can, in part, see the result of this in the reactionary forces that as of late permeate the media – protesters on Wall Street that don’t really know what they are protesting, but somehow perceive something to be wrong. I am not agreeing with their rhetoric or ideology, but rather see something bigger under the surface – the accumulation of wealth in the hands of fewer and fewer individuals. It isn’t envy, it is perceived injustice.
Can one set a cap on how much personal wealth an individual may or may not have? A progressive higher taxation rate for those with a personal wealth of 100 million dollars or more? And shouldn’t tax on capital gains progressively increase as well when it is, in many cases, the solitary form of income for these multi-billion billionaires.
Say you have no job but rather you have a personal wealth of 40 billion dollars of this you invest 30 billion dollars in some venture and accrue a profit of 7 percent which then would mean you have earned 2.1 billion dollars on your investment. Capital gains tax in the U.S. is 15 percent, in Sweden, where I live, it is 20 percent. This would mean that you are only taxed a 315 million dollars (420 million in Sweden). In this case I would not hesitate to say that a higher taxation is necessary in order to disseminate that wealth and put it to use in creating jobs and ensuring the stability of a countrys infrastructure.
It isn’t that I want to curtail any single individual’s capacity to make it in this world and get “a slice of the pie”, rather the opposite and yet there has to be a balance. There is in essence a need for the wealth of the few to do more than simply act as tool for them to acquire more wealth.
Throughout history, the multitude of chaos created by wars and anarchy, the nature of mankind hasn’t always been the most rational and thus it becomes inherently a case of finding the equilibrium of common good and “greed”.
