2 Comments
User's avatar
⭠ Return to thread
Dave Thompson's avatar

Buying into MMT means changing your rationale for WHY we need to tax the rich. Ms. Kelton explains it much more effectively than I ever could of course, which is why you should read the book.

The short version: The government uses taxation to discourage behavior in all corners of public life - congestion taxes, HOV lanes, astronomical tobacco taxes, hell even tariffs. So it would be entirely reasonable to apply that same logic to wealth accumulation in the form of not only tax shelters and the like, but also in neoliberal corporate governance where the insatiable desire for profits and share price always screw the worker.

If the tax loopholes were closed and corporate profits were taxed like they used to be, there's no longer any reason to horde those profits. Instead, they'll spend the money on improving the business, and no matter how they do that, reinvesting money back into the company will at least be a step back in the right direction for workers, and the economy as a whole.

Note that all of this is a tangent away from the core thesis of MMT, but it is a foundational discussion in her defense of MMT. Or am I taking this from Doughnut Economics....? I don't remember at the moment, and I have lent out both of those books so I can't look it up...

Expand full comment
defineandredefine's avatar

This is a great explanation. Thank you.

Expand full comment