Summary: $18 million for a pre-owned Rolex watch vs. tax rates that redress our astounding, historically high economic inequality, in pursuit of social cohesion and equality. Which message do we believe in?
Rolex Now Has a Resale Program. The Watch World Quakes. New York Times, January 18, 2023, by Victoria Gomelsky
There is a saying in the high-end watch trade that there are only two kinds of watchmakers: Rolex and everyone else.
Rolex is an even bigger juggernaut in secondary channels, where its pre-owned watches often fetch twice their retail value, and sometimes far more. (Many watch insiders cite the 2017 auction of Paul Newman’s Rolex Daytona for $17.8 million as the start of the current mania for collectible timepieces.)
Joseph Stieglitz: tax high earners at 70% to tackle widening inequality, The Guardian, January 22, 2023, by Rupert Neate
Joseph Stiglitz, the Nobel prize-winning Keynesian economist, has called for … a special worldwide income tax rate of 70% on the highest earners …
“People at the top might work a little bit less if you tax them more. But on the other hand, our society gains in having a more egalitarian, cohesive society,” the former World Bank chief economist, 79, told Oxfam’s Equals podcast.
Stiglitz said that while an increase in the top rate on income would help lead to a more equal society, introducing wealth taxes on the fortunes accumulated by the world’s wealthiest over many generations would have an even bigger impact.
He described proposals by the US senator Elizabeth Warren for a 2% tax on people with assets of more than $50m and 3% on those with more than $1bn as “very reasonable” and said they “would really go a long way to raising revenues that could alleviate some of our country’s problems”.
Research published by Oxfam last week showed almost two-thirds of the new wealth amassed since the start of the pandemic has gone to the richest 1%. The charity found the best-off had pocketed $26tn (£21tn) in new wealth up to the end of 2021. That represented 63% of the total new wealth, with the rest going to the remaining 99% of people.
Oxfam said for the first time in a quarter of a century the rise in extreme wealth was being accompanied by an increase in extreme poverty. [See also: Oxfam 5 ways billionaires are bad for the economy]
More than 200 members of the super-rich elite last week called on governments around the world to “tax us, the ultra rich, now” to help address the inequality crisis.
The group of 205 millionaires and billionaires called on world leaders and business executives meeting in Davos for the World Economic Forum to urgently introduce wealth taxes to help tackle “extreme inequality.”
Comment:
By Don McCanne, M.D.
Let’s see now. Would we rather have a society in which a privileged few could accumulate much of the monetary work product of the rest of us in order to be able to satisfy personal whims such as being able to pay $17.8 million for a used wristwatch? Or would we rather have an egalitarian society in which people are rewarded appropriately for their work while being assured that their basic needs, such as health care, would be automatically met without having to face financial hardship? (As a reminder, post-WWII, a period of rapid economic growth, the US taxed top income brackets at 90%. High taxes and rising prosperity are mutually compatible.)
No contest: egalitarian values. So let’s get on with it. We all already have access to the time of day; let’s now achieve access to comprehensive health care for everyone in a system that’s affordable for all: single payer!
Editor: Preview of related forthcoming HJM post: Our online cost calculator finds that single payer financed via taxes focused on higher earners, the wealthiest, and corporate profits lowers healthcare spending for 9 out of 10 households.
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