Taxing the Rich is Only a Start, Though its a Good One

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A Socialist Project e-bulletin ... No. 1930 ... November 12, 2019
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Taxing the Rich is Only a Start, Though it’s a Good One

Doug Henwood

It’s become near-consensus on the social democratic left that you can fund a decent welfare state by taxing the rich and shrinking the military. Sad to say that isn’t true. Those are good things in themselves, and you could pay for some excellent things with that agenda, but it would still be well short of actual social democracy.

I’m defining social democracy as a large and robust welfare state that socializes a lot of consumption through taxation and spending, compressing the income distribution, reducing poverty sharply, capping the political power of the rich, insulating people from the risks of sickness and unemployment, and educating people at low cost, all structured to reduce racial, gender, and other inequalities. It’s not the end of capitalism, but it’s a lot bigger than Medicare for All and free college, as badly as we need both those things tomorrow.

We’re sure not spending much on human uplift now. As the first graph below shows,... the US spends less and taxes even less than other rich countries. In 2017 (the vintage of most of these stats), the US government at all levels (aka general government in fiscal jargon) took in 34% of GDP in taxes and spent 38%. Australia spent somewhat less and taxed somewhat more, but otherwise the US figures are the lowest of the bunch.

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