Getting the job done
Since devising and implementing methods to avoid (or greatly minimize) paying taxes is a major activity of the very rich, which provides employment for many bright people, drafting, and getting passed and enforced, effective laws for capping super-high income and wealth would be a truly herculean task. We could anticipate all-out opposition from the world's most powerful people. Even the weak laws we have today are commonly circumvented via a variety of techniques [8].
Assume, for the moment, that, via some political miracle, a steeply graded progressive income tax law was passed, along with various taxes on wealth, that could bring about the capping of income and wealth suggested above. Currently, many very rich people and corporations (e.g., American Express, Apple, and Microsoft) keep a large portion of their assets (totaling many trillions of dollars) in offshore tax havens such as the Cayman Islands, and Ireland, where taxes are non-existent or very low [9]. Unless there are appropriate changes in our laws, we can expect that an immediate result of the kind of tax increases discussed above would be an acceleration of this process. So, in addition to raising or creating taxes, it would be necessary to pass laws that would discourage the transfer of large amounts of money in and out of the country. An article by a prominent sociologist [10], is rich in information pertinent to the subject of this article. A recent NY Times article is very relevant [11].
Conclusions
Given the current composition of the US government (all branches), there is no possibility of enacting any of the measures discussed above for reducing the power of the super-rich, who are virtually in complete command. Those now ruling the country are not going to give up their power voluntarily, or allow the bulk of their financial assets to be taxed away. The best that can be done now is to improve our understanding of the problem and conceivable solutions, and to try to get more people thinking about the issue and to realize the need for real change. Perhaps, when the median income gets below some critical point, enough people will feel the need to take real political action.
References
[1] Wikipedia, "Citizens United v. FEC"
[2] , "The 2012 Money Race: Compare the Candidates", NY Times
[3] David Knowles, "U.S. Senate seat now costs $10.5 million to win, on average, while US House seat costs, $1.7 m", New York Daily News, March 11, 2013
[4] Michael Greenstone and Adam Looney, "Trends", The Milken Institute Review, 2011
[5] Chris Matthews, "Wealth inequality in America: It's worse than you think", Fortune, October 31, 2014
[6] Tax Foundation Blog, "U.S. Federal Individual Income Tax Rates History, 1862-2013 (Nominal and Inflation-Adjusted Brackets)", Tax Foundation, October 17, 2013
[7] David Cay Johnston, "The fortunate 400:", Reuters, Jun 6, 2012
[8] Alexander Arapoglou and Jerri-Lynn Scofield, "10 tax dodges that help the rich get richer", Salon, April 12, 2013
[9] RT, "'Shocking abuse of public trust': Columbia University prof estimates $20tln hidden in tax havens", RT, Jan., 2014
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