The Current

Raising taxes for the ultra-rich can save capitalism, argues author

U.S. congresswoman Alexandria Ocasio-Cortez has suggested America's richest people could pay a 70 per cent tax on everything they earn over a $10-million US threshold. The idea provoked debate in the U.S., but Ocasio-Cortez is not alone in supporting the idea as a way to bridge income disparity.

Rutger Bregman says higher taxes would re-invigorate business and investment

Author and historian Rutger Bregman appeared at Davos last week, where he urged the world's elite business leaders to stop using philanthropy as a means to avoid tax. (Stephan Vanfleteren)

Read Story Transcript

An author and historian is arguing that we need higher taxes on the uber-rich not just to bridge the income gap, but to save capitalism itself.

"We now have a whole class of 'rentiers,' basically capitalists who sit back, do nothing and collect rents," said Rutger Bregman, author of Utopia For Realists: And How We Can Get There.

These "rentiers" collect rent on land and property and "don't really contribute anything to the common good," he told The Current's Anna Maria Tremonti.

Bregman argued that tax revenue could be used to fund initiatives like universal basic income, which individuals can use to fund their own companies or start-ups.

"I think that capitalism will become way more innovative and dynamic, just as it was in the '50s in the '60s," he said.

Bregman appeared at the World Economic Forum in Davos last week, where he urged the world's elite business leaders to stop using philanthropy as a means to avoid tax.

In early January, U.S. congresswoman Alexandria Ocasio-Cortez suggested a marginal tax for America's highest earners.

Once someone earns $10 million US, they would be subject to a 70 per cent tax rate on every dollar earned past that threshold.

Joe Oliver, the former finance minister in Stephen Harper's Conservative government, argued that jurisdictions with high tax rates can de-incentivize workers and companies from investing, and the revenue can be smaller than expected.

"There's not going to be a huge amount of tax collected from people making over $10 million, because very few people make over $10 million dollars," he told Tremonti.

Even if the public "feel good that an ultra-billionaires pays a little more personal tax, of course he or she won't because they're the people with access to huge resources, to tax planner and so on, and they'll figure out a way to avoid it."

Click 'listen' near the top of this page to hear the full conversation.

Produced by Sarah-Joyce Battersby, Howard Goldenthal, and Imogen Birchard.


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