A Practical Vision of a More Equal Society


Thomas Piketty reviews Anthony B. Atkinson's Inequality: What Can Be Done?, in the NYRB (Keystone/Getty Images):

Atkinson here makes two especially innovative suggestions. On the one hand, he calls for the establishment of a national savings program allowing each depositor to receive a guaranteed return on her capital (below a certain threshold of individual capital). Given the drastic inequality of access to fair financial returns, particularly as a consequence of the scale of the investment with which one begins (a situation that has in all likelihood been aggravated by the financial deregulation of the last few decades), this proposal strikes me as particularly sound. In Atkinson’s view, it is intimately bound up with the larger issue of a new approach to public property and the possible development of a new form of sovereign wealth fund. The public authority cannot resign itself merely to go on piling up debt and endlessly privatizing everything it possesses.

On the other hand, alongside this national guaranteed and insured savings program, Atkinson proposes establishing an “inheritance for all” program. This would take the form of a capital endowment assigned to each young citizen as he or she reached adulthood, at the age of eighteen. All such endowments would be financed by estate taxes and a more progressive tax structure. In concrete terms, Atkinson estimates that, with current revenue from the British estate tax, it would be possible to finance a capital endowment of slightly more than £5,000 for each young adult. He calls for a far-reaching reform of the system of inheritance taxation, and especially for greater progressivity with regard to the larger estates. (He proposes an upper rate of 65 percent, as with the income tax.) These reforms would make it possible to finance a capital endowment on the order of £10,000 per young adult.

More here.