IT’S TIME TO REDISTRIBUTE THE WEALTH

INTELLIGENCE SQUARED U.S. DEBATE BRIEFING BOOK

“IT’S TIME TO REDISTRIBUTE THE WEALTH”

IT’S TIME TO REDISTRIBUTE THE WEALTH

MODERATOR JOHN DONVAN

DEBATERS

FOR THE MOTION

ROBERT REICH, FORMER SECRETARY OF LABOR

YANIS VROUFAKIS, FORMER FINANCE MINISTER, GREECE

AGAINST THE MOTION

ALLISON SCHRAGER, SENIOR FELLOW, MANHATTAN

INSTITUTE

LARRY SUMMERS, FORMER SECRETARY OF THE TREASURY

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DESCRIPTION

Economic inequality has become a linchpin of modern politics. As nations around the world face a reckoning on racial and social justice and work to combat the economic impacts of the pandemic, we ask: Is it time to redistribute the wealth? Should we address growing inequality by overhauling our tax system, expanding our social safety nets, and investing more in public initiatives like universal health care, education, and infrastructure? Or would a wealth transfer unduly punish the economic elite, destroy the promise of a meritocracy, and inevitably lead to excessive government intervention in our social and economic lives?

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Table of Contents

DESCRIPTION ......................................................................................................................... 1

FROM THE DEBATERS ............................................................................................................ 3

FOR THE MOTION: Robert Reich ............................................................................................................... 3

FOR THE MOTION: Yanis Varoufakis ......................................................................................................... 5

AGAINST THE MOTION: Allison Schrager .................................................................................................. 6

AGAINST THE MOTION: Lawrence Summers ............................................................................................ 8

GENERAL RESEARCH .............................................................................................................. 9

BACKGROUND ........................................................................................................................................... 9

CORONAVIRUS ......................................................................................................................................... 10

FOR THE MOTION .................................................................................................................................... 11

AGAINST THE MOTION ............................................................................................................................ 12

INEQUALITY VS. OPPORTUNITY ............................................................................................................... 13

WEALTH TAX ............................................................................................................................................ 14

BILLIONAIRE ............................................................................................................................................. 16

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FROM THE DEBATERS

FOR THE MOTION: Robert Reich Robert Reich is a professor of public policy at the University of California at Berkeley and senior fellow at the Blum Center. A former secretary of Labor in the Clinton administration and cofounder of Inequality Media, he is also the author of 18 books, including his latest “The System: Who Rigged It,

How to Fix It.” ARTICLE On Labor Day, remember this: Trump's America works only for the rich

By Robert Reich | September 6, 2020 | The Guardian “No other developed nation has nearly the inequities found in the US, even though all have been exposed to the same forces of globalization and technological change.” ARTICLE: Robert Reich: Four reasons why millennials don’t have any money By Robert Reich | January 9, 2020 | Salon “If we don’t start trying to reduce this generational wealth gap – through policies like debt relief, accessible health insurance, paid family leave, affordable housing, and a more equitable tax code for renters – millions of young Americans will struggle to find financial security for the rest of their lives.” ARTICLE: Robert Reich: Coronavirus crisis is an opportunity to overcome oligarchy By Robert Reich | March 29, 2020 | Salon “The system is rigged. But we can fix it. Today, the great divide in American politics isn’t between right and left. The underlying contest is between a small minority who have gained power over the system, and the vast majority who have little or more.” ARTICLE: Robert Reich explains how the ultra-wealthy have rigged the system By mal Warwick | April 10, 2020 | Berkeleyside “His new book ‘The System: Who Rigged It, How We Fix It,’ explains how systemic changes over the last 40 years have reallocated power upward to a tiny portion of the population – the 1%.” ARTICLE: Income inequality in the United States By Robert Reich | January 16, 2014 | Testimony before the Joint Economic Committee, United States Congress

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“The question is not whether inequality is good or bad. It is at what point inequality becomes so wide as to pose a serious threat to economic growth, to our idea of equal opportunity, and to our democracy. I believe we are reaching that tipping point or have already reached it.”

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FOR THE MOTION: Yanis Varoufakis Yanis Varoufakis, a former finance minister of Greece, is secretary-general of the MeRA25 party and professor of economics at the University of Athens. He is the author of many books, including, “Another Now: Dispatches from an Alternative Past,” which considers how to create a more fair and equal society.

ARTICLE: Yanis Varoufakis: capitalism isn't working. Here's an alternative By Yanis Varoufakis | September 4, 2020 | The Guardian “Leftists excel at pinpointing what is wrong with capitalism…But, when pushed to describe a fully fledged alternative to contemporary capitalism, for many decades we have oscillated between the ugly (a Soviet-like barracks socialism) and the tired (a social democracy that financialized globalization hs rendered infeasible).” VIDEO: Yanis Varoufakis on COVID-19, Brexit, and Austerity By Yanis Varoufakis | March 9, 2020 | DiEM25 ARTICLE: Interview: Yanis Varoufakis on Capitalism, Democracy and Europe By Yanis Varoufakis | April 11, 2019 | DiEM25 “So, if you think of capitalism as a voting mechanism, it is anti-democratic in the sense that money determines power. The evolution of capitalism over the last few centuries is a history of the constant transfer of power to the wealthy, including the power to make decisions that affect the distribution of income.” ARTICLE: Imagining a world without capitalism By Yanis Varoufakis | December 27, 2019 | Project Syndicate “Increasingly stressed and justifiably guilt-ridden, the ultra-rich – or those with any sense, at any rate – feel threatened by the crushing precariousness into which the majority are sinking.” INTERVIEW: Yanis Varoufakis has some ideas about how to save the future By Felipe Ossa | May 25, 2018 | Intelligencer “Capitalism has liberated us. It has generated incredible new technologies and wealth – I love the idea of a robot doing all the chores. But at the very same time, out of the same kind of proverbial production line, it has generated the most spectacular horror and depravity.” ARTICLE: Yanis Varoufakis on global capitalism & how Trump's tax plan is class war against the poor By Amy Goodman | November 3, 2017 | Common Dreams “The difference is that American capitalism has exhausted its capacity to reproduce itself through a process of tax cuts – the trickle-up effect of wealth rising from the bottom to the top 0.1 percent.”

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AGAINST THE MOTION: Allison Schrager Allison Schrager is an American economist, author, and senior fellow at the Manhattan Institute, where she studies tax and monetary policy. Schrager has worked in finance and policy and was a regular contributor to the Economist, Reuters, and Bloomberg Businessweek. She is also the author of “An Economist Walks into a Brothel.”

ARTICLE: Will a wealth tax change the behavior of the very rich? By Allison Schrager | November 8, 2019 | Quartz “In the last few decades economists have relaxed their assumptions that people behave rationally, or in a consistent, logical manner when faced with various financial incentives. But now they are questioning if we respond to incentives much at all.” ARTICLE: Is income inequality always a bad thing?

By Allison Schrager | December 16, 2016 | Quartz “Many economists and analysts take it as given that inequality does economic harm. But for something that has become conventional wisdom, there is surprisingly little evidence to make a definitive case that income inequality is bad for the economy.” ARTICLE: Why the US might want to encourage wealth inequality By Allison Schrager | January 3, 2014 | Quartz “In fact, perhaps we need to be encouraging more wealth inequality. To a large extent, such a gap is a sign of the normal life-cycle of saving.” ARTICLE: In defense of economics By Allison Schrager | September 24, 2019 | Quartz “But lately there is more criticism and skepticism of experts, and it appears to be having an effect when it comes to economic policymaking. The most salient and indisputable lessons from economics are being ignored, as mainstream politicians endorse trade and currency wars, and national rent controls.” ARTICLE: Across the south and midwest, coronavirus is producing a new generation of entrepreneurs By Allison Schrager | August 20, 2020 | Economics 21 “One silver lining of a bad recession is that many people, frustrated by a bad job market, use the time to start a new business. And only several months into the Covid-19 recession, there are already signs that the next big company may already be in a nascent stage.”

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ARTICLE: Government is providing insurance today, not socialism tomorrow By Allison Schrager | May 14, 2020 | Newsweek “But are we on the way down? The scale of the devastation has certainly exposed real weaknesses in our system, especially for the uniquely vulnerable low-income workers who have been hit hardest. However, the government is playing the role it was designed to play in a capitalist system: that of insurer.”

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AGAINST THE MOTION: Lawrence Summers Lawrence Summers has held several senior policy positions, including secretary of the Treasury under the Clinton administration and director of the National Economic Council for the Obama administration. He has also served as vice president of development economics and chief economist of the World Bank. Summers is a professor and president emeritus of Harvard

University. ARTICLE: Tax reform for progressivity: A pragmatic approach By Nick Bowman with Sue Rahr | June 6, 2020 | KIRO Radio “Our belief is that the best path forward is through a combination of deterring illegal evasion – by investing more in an underfunded Internal Revenue Service (IRS) – and reducing legal tax avoidance by broadening the tax base and closing loopholes that enable the wealthy to decrease their tax liabilities” VIDEO: Would a "wealth tax" help combat inequality? A debate with Saez, Summers, and Mankiw October 18, 2019 | Peterson Institute for International Economics ARTICLE: Be very skeptical about how much revenue Elizabeth Warren’s wealth tax could generate By Lawrence H. Summers and Natasha Sarin | June 28, 2019 | The Washington Post “It is worth noting that estimating the tax base for those worth more than $50 million in itself is a difficult task – let alone estimating the revenue that taxing these households can raise. Different approaches to measuring top wealth can paint very different pictures.” ARTICLE: Fair, comprehensive tax reform is the right path forward By Natasha Sarin and Lawrence H. Summers | March 29, 2019| Larry Summers “We share the lawmakers’ enthusiasm for progressive taxation that ensures that the wealthiest pay their fair share. But we believe that base-broadening, efficiency enhancing reforms are the right way to start raising revenue from the ultrarich.” VIDEO: Summers on record surge in U.S. unemployment By Larry Summers | April 2, 2020 | CNN

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GENERAL RESEARCH

BACKGROUND ARTICLE: The great wealth tax debate By Jean Pisani-Ferry | November 9, 2019 | World Economic Forum “Economists are generally reluctant to make normative judgements about wealth inequality, because theory does not provide them a proper yardstick for doing so. ARTICLE: The Liberal Economists Behind the Wealth Tax Debate

By Jim Tankersley and Ben Casselman | February 21, 2020 | The New York Times “Their efforts documenting a sharp increase in the concentration of wealth at the very top and their outspokenness have vaulted the tax from a fringe idea in American politics to the center of a reinvigorated debate on taxing the rich.” ARTICLE: Democrats Want to Tax the Rich. Here's how those plans would work (or not).

By Nelson D. Swartz and Guilbert Gates| September 24, 2019 | The New York Times “’But the Democrats now are a good deal more aggressive than they’ve been in the past.’ Four ideas have gained the most traction: a tax on wealth, raising marginal tax rates, expanding the estate tax and changing how the government taxes capital gains.” ARTICLE: The U.S. Inequality Debate By Anshu Siripurapu | July 15, 2020 | Council on Foreign Relations “The effects of inequality are similarly varied, and have been seen as exacerbating crises such as the COVID-19 pandemic and deepening social divisions.” ARTICLE: How much do you need to make to be in the top 1% in every state? Here's the list By Samuel Stebbins and Evan Comen | July 1, 2020 | USA Today “While income inequality is a fundamental component of the U.S. capitalist economy, a recent poll conducted by the Pew Research Center found that 61% of Americans think that it has gone too far.” ARTICLE: Thomas Piketty goes global By Idrees Kahloon | March 2, 2020 | The New Yorker “The moment was ripe for a grand, iconoclastic theory, and that’s exactly what Piketty provided, with detailed figures and lucid prose.”

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CORONAVIRUS ARTICLE: Paid to stay home: Europe's safety net could ease toll of coronavirus By Liz Alderman | March 6, 2020 | The New York Times “Europe is sometimes considered a home of overly generous social policies. But as countries around the world scramble to control the deadly coronavirus outbreak, some analysts say those social programs and protective labor rules could serve as a powerful vaccine against the virus’s feared economic toll: recession.” ARTICLE: Coronavirus could push Americans to lobby for a social safety net like Europe's, experts say By Chloe Taylor | April 20, 2020 | CNBC “However, the devastation wrought by the coronavirus could push U.S. voters to favor policies supporting social security measures like universal health care or stronger retirement schemes, according to Housel.” ARTICLE: Six ways the coronavirus will make inequality worse By Noah Smith | May 13, 2020 | Bloomberg Opinion “Some have called the virus a great equalizer, because it can strike even the rich and powerful. But in terms of the long-term effect on economic outcomes, the disease likely to be anything but an equalizer.” ARTICLE: Coronavirus means the era of big government is back By Gerald F. Seib and John McCormick | April 26, 2020 | Wall Street Journal “The crisis has been not just a public-health emergency requiring a sweeping response, but also the cause of the most searing economic pain since the Great Depression, summoning forth a multi-trillion-dollar government intervention into the economy.”

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FOR THE MOTION ARTICLE: Bernie Sanders is right, it’s time to redistribute economic power By Matthew Lawrence | October 15, 2019 | The Guardian “The case for bold action is clear and overwhelming. Only a deep reconstruction of economic and political rights can challenge oligarchic power and halt runaway environmental breakdown.” ARTICLE: Sanders and Bloomberg want to redistribute wealth. Most millionaires and billionaires don’t. By Elizabeth Suhay, Marko Klasnja, and Gonzalo Rivero | February 17, 2020 | The Washington Post “Our research finds that wealthy people are more likely than others to believe the system is fair, and are more economically conservative than others. These Democratic candidates represent a small but significant minority, as we’ll explain below.” ARTICLE: 'Millionaires for Humanity' sign on letter Date Unknown | Millionaires for Humanity “Today, we, the undersigned millionaires, ask our governments to raise taxes on people like us. Immediately. Substantially. Permanently.’”

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AGAINST THE MOTION

ARTICLE: Millennials to redistribute wealth from older generations to the young in new ‘age of disorder,’ warns Deutsche strategist By Rupert Steiner and Steve Goldstein | September 8, 2020 | Market Watch “’It probably won’t take a great deal of persuasion to convince investors that there’s an ‘age of disorder.’” ARTICLE: Wealthy Americans already pay their share By Phil Gramm and John F. Early | February 25, 2020 | Wall Street Journal “The claim that rich Americans pay a smaller share of their income in taxes than any other households is verifiably false…To be sure, the average household in the top 1% retains almost 18 times as much income after taxes and transfer payments as the average bottom-quintile household. But it pays more than 219 times as much in taxes.” ARTICLE: The fundamental fallacy of redistribution By Alan Reynolds | February 11, 2016 | CATO Institute “Actual taxes and transfer payment distort behavior in ways that undermine economic progress and commonly produce results (such as trapping people in poverty) that are the opposite of their stated intent.”

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INEQUALITY VS. OPPORTUNITY

ARTICLE: The top 1% of Americans have taken $50 trillion from the bottom 9% – and that's made the U.S. less secure By Nick Hanauer and David M. Rolf | September 14, 2020 | Time “As the RAND report…demonstrates, a rising tide most definitely did not lift all boats. It didn’t even lift most of them, as nearly all of the benefits of growth these past 45 years were captured by those at the very top. And as the American economy grows radically unequal it is holding back economic growth itself.” ARTICLE: Yes, global inequality has fallen. No, we shouldn't be complacent. October 23, 2019 | The World Bank “Between 2008 and 2013, global inequality fell for the first time since the industrial revolution, according to the latest available data. This historic reversal was largely driven by rising incomes in populous developing countries that helped close the gap with high-income countries.” ARTICLE: 6 facts about economic inequality in the U.S. By Katherine Schaeffer | February 7, 2020 | Pew Research Center “Rising economic inequality in the United States has become a central issue in the race for the Democratic presidential nomination, and discussion about policy interventions that might help address it are likely to remain at the forefront in the 2020 general election.” ARTICLE: Exploring wealth inequality By Chris Edwards and Ryan Bourne | November 5, 2019 | CATO Institute “Many political leaders and pundits consider wealth inequality to be a major economic and social problem. They complain about a shift of wealth to the top at everyone else’s expense and about plutocrats dominating policymaking in Washington. Is wealth inequality the crisis that some people believe?” ARTICLE: The truth about income inequality By David R. Henderson | February 2020 | Reason “Most of what is framed as a problem of inequality is better conceived as either a problem of poverty or a problem of unjustly acquired wealth.” ARTICLE: Waking up to a misleading inequality report on the Sunday morning news By Ed Conrad | September 26, 2020 | National Review “Who will America ultimately tax to pay for the trillions of dollars the government has redistributed during the pandemic? Keynes argued that borrowing, consuming, and reemploying unused capital and workers in a recession, when they would otherwise sit idle and deplete their savings, helps to preserve the tax base.”

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WEALTH TAX

ARTICLE: What could the US afford if it raised billionaires' taxes? We do the math By Michael Linden | December 13, 2019 | The Guardian “It’s no wonder ‘abolishing billionaires’ has become a rallying cry. But what does it really mean? ...does it entail something a little more structural: unrigging the system that gave us billionaires and instead creating an economy in which everyday people get the benefits from the growth that they have created.” ARTICLE: How to tax the rich, explained By Dylan Matthews | March 19, 2019 | Vox “This isn’t a change that came out of nowhere. It comes out of a growing dissatisfaction with the timidity of Democratic efforts to tax the rich in the Clinton and Obama eras, and a growing intellectual trend in economics that has given a sound theoretical basis to tax plans that soak the rich.” ARTICLE: Taxing the superrich By Emmanuel Saez and Gabriel Zucman | April 9, 2020 | Boston Review “Wealth is power. An extreme concentration of wealth means an extreme concentration of power: the power to influence government policy, the power to stifle competition, the power to shape ideology.” ARTICLE: Why Larry Summers' opposition to the wealth tax is predictable and wrong By Erik Sherman | October 27, 2019 | Forbes “Making some shifts in today’s or tomorrow’s allotment isn’t a dike to hold back the swelling ocean that compound interest generates because the gap never starts to close. The wealth already gained grows upon itself, bids up assets, and displaces opportunities.” ARTICLE: The rich really do pay lower taxes than you By David Leonhardt | October 6, 2019 | The New York Times “For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate – spanning federal, state and local taxes – than any other income group, according to newly released data…taxes that hit the wealthiest the hardest – like the estate tax and corporate tax – have plummeted, while tax avoidance has become more common.” ARTICLE: The New York Times is wrong. The rich pay more taxes than you do. By Adam Michel | October 15, 2019 | The Heritage Foundation “By almost every measure, the U.S. has one of the most progressive systems of taxation in the world, in which high-income people pay the highest taxes.” ARTICLE: The toxic Warren wealth tax By Richard A. Epstein | February 11, 2019 | Hoover Institution

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“It’s not clear why we should worry about inequality of income or wealth. Both concentrate solely on the gap between those at the top and those further down in the distribution…. But where is the social problem?” ARTICLE: Wealth taxes will not solve inequality By Megan Greene | November 28, 2019 | Financial Times “The economic problem is that whatever your moral views on soaking the rich, history shows wealth taxes do not usually work.” ARTICLE: Taxing the rich may not pay the bills for liberal agenda By Bernie Becker | March 12, 2019 | Politico “There are many reasons a direct tax on wealth might not work: First, rich people have a wide range of tax avoidance schemes. Second, it’s hard to measure wealth in order to assess tax levels, especially assets like art. On top of that, there are legal and constitutional questions about targeting a particular demographic.” ARTICLE: Tax the wealthiest of the 0.1 percent? Not so fast? By The Editorial Board | January 30, 3019 | USA Today “Warren’s wealth tax is particularly problematic. It would go right at America’s economic bright spot, its engine of technology innovation.”

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BILLIONAIRE

ARTICLE: Abolish billionaires By Farhad Manjoo | February 6, 2019 | The New York Times “A billion dollars is wildly more than anyone needs, even accounting for life’s most excessive lavishes. It’s far more than anyone might reasonably claim to deserve, however much he believes he has contributed to society.” ARTICLE: Bill Gates: My $109 billion net worth shows the economy is not fair By Catherine Clifford | January 3, 2020 | CNBC “None of the richest people in the world have made their fortunes solely through a salaried job, and for that reason Gates believes the government ‘should shift more of the tax burden onto capital’ rather than labor.” ARTICLE: Don't abolish billionaires By Will Wilkinson | February 21, 2019 | The New York Times “The progressive idea here is usually that people with vastly more wealth than the common run of citizens wield vastly disproportionate political power and therefore imperil democracy and the equal worth of our basic rights. It’s a worry we’ve got to take seriously, but it’s based more in abstract theorizing than empirical analysis.” ARTICLE: Why do Democrats kick around America's rich? By Bernard Goldberg | January 2, 2020 | The Hill “You can’t even count on the two billionaires running for president on the Democratic side to say a kind word in defense of their fellow tycoons. In today’s Democratic Party, that would be an act of political suicide.” ARTICLE: Facebook boss Mark Zuckerberg joins centibillionaire club By Mark Sweney | August 7, 2020 | The Guardian “Mark Zuckerberg’s fortune has passed $100bn (£76bn) for the first time, adding him to an exclusive club of the world’s centibillionaires, after Facebook’s shares surged on news it is to launch a rival to the video-sharing app TikTok.” VIDEO: How billionaires saw their net worth increase by half a trillion dollars during the pandemic By Hiatt Woods | October 30, 2020 | Business Insider “Combined with their immense investing and purchasing power, billionaires have had government resources in addition to their own resources to profit from during economic upheavals. And wealth friendly tax laws and loopholes then keep those billionaires at the top.”

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ARTICLE: The Finance 202: Billionaires are giving a tenth of a percent of their wealth to coronavirus pandemic relief By Tory Newmyer with Brent D. Griffiths | June 5, 2020 | The Washington Post “The top 50 richest people and families in the United States have dedicated less than one-tenth of one percent of their collective $1.6 trillion toward alleviating the health and economic crises brough on by the coronavirus pandemic, a survey by Roxanne Roberts and Will Hobson finds.”