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economist Richard both joins me today he is professor emeritus of economics at my
alma mater the University of Massachusetts and currently a visiting
professor
at The New School University in New York City
professor walk like an interesting message on our new
reddit discussion forum where the premise was okay
American conservatives say they oppose many social programs and sometimes even
our tax system because they're against so-called redistribution of wealth
specifically from the rich who they say have earned it
to the poor and middle class who they say have not earned
that money and it was suggested by a viewer that the American right
actually does favors some kinds of wealth redistribution
as long as it transfers wealth to the rich
rather than from the rich and the argument is hey let's look at the stock
market
the stock market does what the right accuses the government is doing
accept that the lazy recipients have the handouts are wealthy people
instead above the poor and they can set contention is that
money is being received by the upper echelons
above above the income brackets by work done
in these publicly held corporations by the worker class which
disproportionately does not
own stock what do you think of this idea could disqualify is the so-called
redistribution absolutely and that it's been
the major former redistribution I
for the last two to three hundred years the truth I V is the way the system is
set up
arranges for the majority
to produce more then they get in wages and salaries
the difference being a surplus or profits
whatever you call it and that bad ok rules to the people who have oh well
and thereby become wealthy your you don't think it is simplest possible
terms
if you all a share of stock that's all you do
you just own it you should dear four times a year
check comes to you call the dividend
that is paid to you by a corporation often
thousands of miles away from you whose board of directors is making a lot of
workers do a lot
pains and selling the products and taking a portion of the revenue and
mailing it to you
you dole jewell anything now to play devil's advocate on that
could one not say well okay you're not physically doing something
but the money that is put in by all the shareholders
is money that is at risk and its financing the business and creating the
jobs for the workers therefore
should there not be some reward for taking on that risk
well as the little bit like the chicken and the egg problem except we know which
came
hurt the only way that the folks who have the money
can make it available for production is if they got it somehow
in the first place right and the only way you can get that kind of money
the kinda well that we're talking about if you already
are in the position %uh either being an employer or more likely
a shareholder me look at it this way 1 percent up the top the top one percent
of shareholders
Alden estimated 75 percent up the shares
the that is not a process that comes out though
lots a little people saving money and putting it aside
and then deciding to risk it the millions of people who own shares
that way all altogether a trivial amount of shares
the basketball of the stock market are huge
collections you just wanna rations lol
that have accrued to people who believe in the position
to siphon the surplus to siphon the profits
of a little business match sometimes
sure sometimes those businesses
are actually the product that the hard work other group entrepreneurs
but that's the minority the majority of the money in the stock market
if the money that was earned 1020
fifty a hundred years ago there has been collecting
dividends and capital gains and becoming larger
that's why we need all names like Rockefeller and Carnegie
and dozens and dozens of others in short
the way capitalism works there's two ways to earn
in Kop even by your labor or my watch you
home and you get the best all Appian com
if you own a lot of things which means that also on
are in the best position to get more which is a history of the growing
siphoning up the products of the many
into the well up the relatively few there's one other
component love this redistribution which I want to run by you which is when we
hear about
big corporations like a GE paying in net effective
zero tax rate for example could you not argue
that shareholders are receiving and artificially
higher share value and higher dividend
because none of that is being Ian away
by effective tax is paid somebody is paying those taxes certainly the workers
that GE are paying taxes on the income
and then paying sales taxes when they when they purchase products et cetera
the company is not and therefore that could be
another way that shareholder return
is subsidized in some way without
GE itself actually paying taxes on earnings
not only is that a possibility what corporations like GE
bolster about this higher they do explicitly
you know me you are I that this suggests the possibility
GE employees a small army
%uh lawyers accountants economists like myself
285 them on precisely how to locate their businesses around the world
so the profits they make show up in the accounts
a backcountry which taxes then least
so that they can minimize their overall tax bill
and then they'd go let their annual meetings and the president or the vice
president
stands up in front of the 200 major shareholders that show up
if that many and proudly describes
the brilliant way they manage their business last year
to reduce or minimize their tax burden
by the way that's how they all so yes I've
course that's a redistribution changed
the money the government needs that it cannot get by taxing corporations
it turns around and taxes individuals
just like the money and get from taxing rich individuals
who use many of the same strategies it has to turn around and tax
middle and lower income people which is why we've had in the United States well
at
fifty years the so-called tax revolt
when the middle in the lower classes at protests that the burden of taxation
pushed on their
that shared failures what they didn't understand
is that the burden on them is because corporations and the rich
pushed in all themselves instead they got some pretty
the idea we should cut all taxes also the rich
which already loll and those in the middle and the poor
and in that way played into their hands of the very people whose taxes
8 strategies plunged the lib middle in the lower lappam our country
into such trouble last thing I want to touch and we we have just about a minute
left here
when we talk about everything we've just talk about the redistributive nature of
the stock market and and shareholders
if we didn't have a situation where stock ownership
was so drastically overwhelmingly skewed to the richest
in the country with the system be a bad way above investing in one's future at
its base in other words
would you be less displeased with the concept of investing in companies and
earning dividends and capital appreciation
if there if the ownership love these shares was more evenly distributed
amongst the the different social classes
sure I P pleeease but only in the sense that while that's a modest step
it is a modest step in the right direction my baby
you wish this as every honest corporate leader
will tell the profits earned by any cooperation
on the net output up what everybody contributes
every man and woman in the air giving their muscle power giving their
brainpower
in a thousand ways to see and recognize
and a thousand ways that are something to keep the first themselves
doesn't understand the creativity of doing it in a new and different way
since since they admit everybody contributes
my answer is simple: if everybody contributes
they did give everybody a share up the surplus they produce
rather than allowing what is the product if everybody
to become the old value up such a tiny nun
we've been speaking with economist Richard wolf is professor emeritus at
the are University of Massachusetts and also a visiting professor
at New School University here in New York City
thanks as always for being with us thank you very much Damon talking in the
future