The solution to inequity and poverty, which will also improve productivity and stir innovation is the Single Tax.
Tax the non-manmade resources of the world--land, oil, coal, air & water (when they're polluted)--while untaxing both wages and capital derived from production (not including capital from speculative investments). The basic problem is that a few monopolists own the "land" (in the classical Political Economic use of the term), while charging the rest of us rent upon it.
So, for example, Exxon is able to gross 46 billion in profits because they can charge us rent on oil that had skyrocketed in value in 2008. Did Exxon make the oil? No, they just extracted it. Fine, they can keep all the profits from that, but the market has put a price on the actual oil itself, which dead dinosaurs made, not Exxon, so they should pay all of us rent to develop it, which, as it turns out, is by far the largest chunk of their profits. If the People--through their elected government--truly owned the resources like oil, they could charge Exxon, or whomever, to develop it, and there would be a lot of takers even at normal non-speculative oil prices. Under a Single Tax, speculation would nearly end, because taxes would prevent it from starting. Land prices would come down to levels that reflect true value--because land could not be held by speculators who profit by depriving the rest of us of its use; it would be prohibitively expensive to do so,and the average person would be able to afford a home again without going into 30-year hock to the banks. The banks also, do not own the land; that too belongs to all of us. There IS added value in a building, and the owners should profit from that, but try to imagine the most posh, upscale building you can, relocated to central Alaska, and you'll quickly see how little value is in the building itself, and how much derives from land. Land gains value due to the natural increase in commerce resulting form population density, not because this building or that one is built there.
These ideas are not new. They date from Henry George's book, "Progress and Poverty," written in 1879. The book remains the best selling economics book of all time, selling second only to the bible when it came out. There are many online and written resources as well, espousing the Georgist philosophy:
...to list just a very few of very many sites. Classes are given for free in the Henry George School in New York City where I am currently enrolled.
We CAN have it both ways--high productivity due to the untaxing of labor and capital, while also achieving social justice and progressive taxation and protection of the finite resources of the world. The answer is the Single Tax.
