The inequality tax – a response to OWS
In a New York Times Op-ed Ian Ayres, a professor of law at Yale, and Aaron S. Edlin, a professor of law and of economics at the University of California, Berkeley http://www.nytimes.com/2011/12/19/opinion/dont-tax-the-rich-tax-inequality-itself.html have proposed an interesting response to the OWS complaint about the inequality that is now tearing the nation apart.
Taking their cue from Judge Brandeis’ reflection “We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both” made at the height of the robber baron era before WW1, they have come up with the Brandeis ration defined as the ratio of the average income of the top 1% to the median (not average) income. Their goal is to not let today’s Brandeis ration of 36 (the average 1%’er income being 36 times the median income) get larger without an extra tax – thus creating an incentive for the rich that control our economy and corporations to increase the median income if they want to lower their tax.
From the op-ed “If the average 1-percenter made more than 36 times the income of the median American household, then the I.R.S. would create a new tax bracket for the highest 1 percent of income and calculate a marginal income tax rate for that bracket sufficient to reduce the after-tax Brandeis ratio to 36”. where “This new tax, if triggered, would apply only to income in excess of the poorest 1-percenter — currently about $330,000 per year”.
I do like the automatic nature – one bill is passed and just as future tax brackets are automatically adjust with the inflation rate, the Brandeis tax would be adjusted for changes in the prior year median income.
But we would need a trans-formative president and a filibuster proof Congress to get this – oh, right we thought we had that and ended up with “premium support” health care reform instead of single payer for basic benefits with a budget and a legal requirement to accept the national plan payment as payment in full for those basic services.
Guess we will wait awhile before the problem of extreme inequality is taken up – and I hope when it is taken up it will be via the ballot box and not via violence – real “class warfare”.