Elghali

Capitalist

[Elghali @elghalij_]

@CryptoPicsou @0xRyzed Interested

[Elghali @elghalij_]

It is surprising that the following claim holds: no political reform on earth in at least the last 300 years has been as powerful, in terms of income redistribution, as the events of 1914–1945. To this day, the top 1% and top 10% have not recovered their pre-World War I shares of either income or wealth (although they are slowly reclaiming them).

Today we have once again returned to the claim that “taxing the rich” is the all-in solution. Debating whether it is effective tends only to put two ideologies at the same table. A better question is whether taxing the rich can hold as a long-term reform. Before 1914, modern progressive personal income taxes were new or non-existent. The U.S. federal income tax began only in 1913 at a top rate of 7%. The United Kingdom had a modest “super-tax” France and Germany had low or negligible top rates.

During the war the political logic was compensatory fairness. High progressive rates were sold as wartime necessity and moral equality (United States 1917: 67%; 1918: 77%; United Kingdom: 50–60%). World War II produced the highest rates of all (United States 1944: 94%; United Kingdom peak: 98%). Those rates remained extremely high for decades. Among the reasons was a political consensus that progressive taxation was a tool of social cohesion and inequality reduction.
The decisive drop began in the late 1970s with an intellectual shift toward neoliberal ideas influenced by Friedman, Hayek and others: the U.S. top rate fell from 70% in 1980 to 28% in 1986. High progressive rates came to be seen as inefficient and punitive rather than primarily redistributive or compensatory.

The reasons for those hikes and sudden drops were not purely ideological. The wars induced massive indebtedness and reconstruction costs. Out of them emerged the importance of the welfare state, social insurance, and public investment in education, housing and the like. I am not treating this observation as proof of a binary conclusion. I understand that the instability of these rates does not mean we failed to improve global welfare. It would be as foolish to claim that as to claim that France’s 1789 revolution was ineffective because the tax on the rich imposed afterward was quite modest (1–2%). (It was in fact a universal tax on successions; but in a society where 90% of the wealth was held by 10% of the population, calling it a tax on the rich is a reasonable shorthand.) Still, it would be equally foolish to think that overall tax levels would have fallen without Reagan, Thatcher, or at least the ideology those figures carried.

My question is this. Every good economist understands that the two most powerful factors determining a state’s future are education and healthcare. Their effects, though wide-ranging, appear only over decades. How, then, can a reform driven by the ephemeral sentiment of a population fulfill long-term growth and, more than that, serve the poor?

[Elghali @elghalij_]

Hyperliquid vs. Binance, Bybit, dYdX v4.
Working paper on execution, price efficiency, resilience under stress.

https://t.co/wzNvelxU1j