by Mitch Kokai
Senior Political Analyst, John Locke Foundation
French economist Thomas Piketty generated plenty of publicity last spring for his book bemoaning income inequality and calling for large-scale tax increases. Michael Barone‘s latest column posted at Human Events reminds us that Piketty’s ideas did not crop up during the recent election campaign.
Liberal economists and pundits hoped that his revelations would finally get politicians to support policies like Piketty’s 80 percent tax rate on high incomes and progressive tax on great wealth — and get the masses to vote for them.
So far it hasn’t happened here or just about anywhere.
You didn’t see any campaign ads calling for Piketty taxes this fall. You didn’t even see any ads hailing Democrats for having raised taxes on high earners in early 2013. Democratic candidates in seriously contested races didn’t come close to advocating such policies. …
… Even after the election, some Democrats argue that they didn’t hit the issue hard enough. One Democrat’s advice to President Obama, according to Politico, “is focus on income inequality, and talk about and propose things, and just be a fierce advocate of addressing the economic divide. That will leave people after two years saying the Democratic Party really stands for something.”
“Propose things” — but what? A recent Congressional Budget Office report shows that when you measure federal taxes paid minus federal transfers received (welfare, food stamps, Social Security, etc.), the top 20 percent of earners pay an average of $46,500. The next 20 percent pay an average of $700. The bottom three-fifths get back more than they pay. Plus, the U.S. already relies more heavily on the income tax for revenues than any other advanced economy nation.
In other words, America already has lots of economic redistribution. American voters evidently sense that more redistribution would sap economic growth. They’re willing to throw a little to minimum wage earners, but they don’t want to kill the geese laying the golden eggs.
Americans are not alone in feeling that way. You don’t see much demand for Piketty policies in other countries either.