“Tax the rich.” The chant gets louder as the liberal left begins to flex its muscles Alexandra Ocasio-Cortez (AOC) cites history as evidence the rich could pay more taxes. She reminds us at one point in our history the tax rate was as high as 70%.
I’m no economics major, as she was, but I’m older and have a longer memory. In the 1950’s and 1980’s the upper income tax range was 90% and 69% respectively. Even so, an income tax increase did little to redistribute the nation’s wealth. Congress likes to spend spare cash on the military or to build bridges to nowhere and airports no one uses.
What we need, as voters, is an understanding of how money flows in a global economy. E-commerce muddies the water, for example. That’s because some types of transactions “are often not properly in the economic data.” (“Meet the New Agents of Globalization,” by Shawn Donnan, Blumberg Businessweek, Jan. 14, 2019, pg. 31.) Take the electronic game Fortnite as an example. The company brings in billions of dollars each year selling “Battle-packs” that allow players to “customize their avatars.” These transactions aren’t tracked accordingly. (Ibid pg. 31.)
Apple’s operating systems pose a similar problem. How do apps for smart phones made in China, get counted as an American export when the phones with these new apps are sold in China? Hal Varian, Google’s chief economist speculates if we separated those transactions, the “U. S. $500 billion annual goods and services deficit would be reduced by $120 billion overnight.” (Ibid, pg. 31.)
Many experts are calling for a retooling of the data we collect in the digital age. Donald Trump could use the information, like the rest of us. He beats his breast about a need for a wall to keep out asylum seekers, but forgets his NFTA agreement, “enshrines the right of data to flow freely across North America and bans any requirements by governments that even sensitive data be stored…” With no way to track, it’s difficult to measure.
But okay! Let’s tax the rich.