Perhaps it’s Piketty’s mild manner that disconcerts; or perhaps it’s the matter-of-fact way that he points out that the most prosperous period in US history – 1950-70 – coincided with a top marginal rate of inheritance tax of 80% and of income tax that was even higher.
No one actually paid it. Which does sorta argue the other way, doesn’t it?
As societies distribute income, wealth and education more widely, so they become more prosperous.
OK, fun theory. So, we’ll have to measure the distribution of the output of that education then, won’t we? The human capital that results? And what is it that is not included in any of the calculations of the wealth distribution? Human capital…..
Evidence on these postwar regimes confirms that very high marginal tax rates are both reasonable and effective. But they had a lurking weakness, which Piketty views as fatal: they accommodated highly unequal access to education. Not only is educational equality the biggest factor in economic development (more so than property rights, he argues), the sharp division between graduates and non-graduates produced political schisms that, by the 1990s, had left the working class electorally homeless.
So, yes, human capital is important then. Better start measuring the distribution then, yes?