Of course, proponents of higher taxes on wealth and income believe they can foster competition and social mobility. If they fund improvements in education, such thinking goes, that may help today’s poor become tomorrow’s champions. But France’s experience in 2012 poses questions about how much can be raised before wealthy individuals move abroad. In the U.S. there’s a vocal debate over how much Warren’s wealth tax would actually bring in.
The rise of left-wing politicians such as Warren and Britain’s Jeremy Corbyn suggests a hunger among younger voters for much greater redistribution. While higher taxation may make the world fairer, there’s little evidence it will make the economy innovate more or grow faster. Robust competition enforcement is a better answer. Before you bash the rich, try busting the trusts.
Ferdinando Giugliano writes columns and editorials on European economics for Bloomberg View. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.