The Nature of Wealth Redistribution in Today’s World: Yang Got It Right
The wealthy have long argued against wealth redistribution claiming they earned their money and deserve to keep it, or at very least not pay more, proportionally speaking, than those who aren’t wealthy. The argument is simple: “Why should I have to pay more simply because I make more?” “Why do others who haven’t done what I have deserve to get some of my profit?” While a pretty compelling argument on the face of it there have also, of course, been pretty strong and compelling arguments against it such as for those who got lucky, were born into wealth, or have so much money they couldn’t spend it in their entire lives. Even those who aren’t necessarily wealthy, at least being millionaires or billionaires, have argued in principle that taxes such as income tax are theft, the government taking earned money. If you’d like to read my take on the necessity of taxes and the plights that I and many others have with the tax system in the U.S. you can read some of my previous posts but I’m not meaning to touch on those today. Today I want to talk about how these arguments are soon to be outdated and irrelevant, or, really, already are.
If you paid attention to Andrew Yang’s 2020 presidential run you know he advocated for a Universal Basic Income, the Freedom Dividend of $1,000/month for every adult citizen age 18 and older. I’ve talked to probably hundreds of people about this idea and one of the most frequent responses, and tied assumptions, is “How are we going to pay for that? We’d have to pay a lot more in taxes to fund it.” For anyone in the Yang Gang the response to this is pretty easy and usually gets an interested reply: “The proposal is to put a 10% Value Added Tax, or VAT, on technology companies like Amazon, Facebook, Google, and Uber who are and are set to continue profiting the most off technology, automation, and artificial intelligence which are not paying their fair share in taxes, not taxing everyday people more.” This revolutionary idea could only have been proposed in today’s world but that fact right there is the proof that this is the only idea moving forward. It is, in fact, built into the nature of today’s world and society.
As newer, more useful, important, and powerful technologies have emerged, more and more money naturally flows to those industries. Due to the nature of inventing technologies the first ones and sometimes second to the game end up taking pretty much the whole market. Even when there are a few companies in competition, as is encouraged in a free market economy, the number of people profiting off of these technologies is extremely limited and restricted compared to any emerging industry we’ve previously seen. The reason for this is because the goal of technology is to reduce the amount of work needed by a human or to make lives easier. So if someone were to create a robot that could produce a product from start to finish it’s obvious that only that person would profit off of that invention and production because only one person is needed in the process. In the real world, the efficiency of automation and the number of people needed are obviously lower and higher, respectively. However, the technology industry is constantly moving more in that direction. Additionally, because of the second reason, technology being designed to make lives easier, things like smartphones have become almost a necessity in today’s economy. Because everyone is buying those things a large amount of money is being funneled to those few industries constantly. This makes wealth redistribution, as ever thought of previously, completely obsolete and outdated.
Now, if the tax system actually worked this wouldn’t necessarily be a problem because wherever the money goes it would be getting taxed. However, companies like Amazon have figured out every loophole they can to make sure the money that exists within the company, not being paid out to shareholders or executives, never gets taxed a penny. One way they do this is by directing that money to new projects to grow their company so they can write it off as expenses even though the money was profit and is now being used to build infrastructure to produce further profit. This is one of the largest driving factors behind wealth inequality in the country today and soon will be the largest factor by a huge amount and with our current structures, almost none of that money will be redistributed to the people.
People on both sides of the political aisle will agree that wealth redistribution of a sort is necessary, what they don’t agree on is how to go about that. Previously, people on the left have suggested things like wealth taxes that I mentioned at the beginning of this article but, as I also mentioned, there is strong opposition to that idea because, to a lot of people, that seems unjustifiable and like theft. Additionally, the proposals included using that money to create government programs to help people which also has staunch opposition from the right. Luckily, these ideas are now old news. The new form of idea is to tax these corporations directly, not the individuals in charge, and distribute that money directly to the people instead of putting it into historically largely ineffective and often counterproductive government programs. As we saw with Andrew Yang’s campaign, this is an idea of wealth redistribution that has bi-partisan support because it’s extremely simple, straight-forward, makes sense, and doesn’t target individuals in order to help other individuals.
While I do think a UBI is the best option to deal directly with this problem I am open to alternative ideas of redistribution that follow the same method of taxation. One idea is to take the money and redistribute it to local and small businesses along with main street industries in order to keep these important but currently disappearing entities alive and to fuel them to prepare themselves for the coming fourth industrial revolution while also directly giving communities money to support their constituents and community structures at large. Additionally, one could imagine a “buy your own robot” type of society where everyone is given some of that money to start a technology business or technology-fueled business to distribute the tech industry and fill a small portion of the production everywhere to create income for everyone. This seems like an unnecessary and needless step but it would work and we know the government loves unnecessary and needless steps. Whatever the method of distribution is though, it must help the PEOPLE and their communities DIRECTLY.
In a way, I’m glad the tax system is broken right now because that gives us a window to specifically fix it in order to put that money towards wealth redistribution rather than if the system were already taking that money because it would most likely be going towards bloated government programs or right back to helping large corporations. Everything has led to this exact moment and there is one course of action that leads to success for the people. All eyes are on Capitol Hill now as the correct solution has entered the scene, the inventions needed to create an extremely wealthy, comfortable, and enjoyable society have reached their time, and the problem is worse than ever. There is but one option, an obvious, laid out option. It is all up to our “representatives”, or the electorate in 2024, to get their heads out of their asses and make the right choice.