Joseph Stiglitz called for the world’s highest earners to hand 70% of their income over to the government.
Nobel prize-winning economist Joseph Stiglitz has called for world leaders to impose a tax rate of 70% on their wealthiest citizens, and to take a cut of inherited fortunes. Stiglitz claimed that most of the planet’s billionaires are rich simply “out of luck.”
Such a high rate of taxation “would clearly make sense,” he recently told Oxfam’s ‘Equals’ podcast.
“People at the top might work a little bit less if you tax them more. But on the other hand, our society gains in having a more egalitarian, cohesive society,” he claimed.
Stiglitz, the former chief economist of the World Bank, won the Nobel Prize in economics in 2001 for his contribution to the theory of information asymmetry, or how people make decisions when one party is less informed than the other.
A supporter of carbon taxes and land taxes, Stiglitz has in recent years promoted heavier levies on corporate profits and multi-millionaires, and has backed US President Joe Biden’s calls for a global minimum corporate tax rate.
In his interview with Oxfam, Stiglitz also advocated for taxes on inherited wealth.
“We should be taxing wealth at a higher rate, because much of the wealth is inherited wealth, [for example] – the young Walmarts, inherited their wealth,” he said.
“One of my friends describes [this] as winning the sperm lottery – they chose the right parents. I think we have to realise that most of the billionaires have gotten much of their wealth out of luck.”
Opponents of inheritance tax, however, argue that it amounts to the double taxation of a deceased person’s wealth, and that it encourages the rich to move their fortunes offshore.
The UK already applies a 40% tax on inheritance above £325,000 ($403,000). There is no federal inheritance tax in the US, although certain states tax inherited assets, and the federal government claims between 18% and 40% of estates worth over $13 million.
US Senator Elizabeth Warren, a Democrat, has proposed a 2% tax on the households of people with assets of more than $50 million, and 3% on those with more than $1 billion. Stiglitz called Warren’s proposals “very reasonable.”
Image credit: Karolina Grabowski