alt Hacker NewsHow do you arrive at the conclusion that cuts to transfer payments (entitlements) cause economic harm but cuts to productivity (capital investment) does not?
One has a disproportionate first-order effect on the poorer, it's true, but that wasn't your contention.
1. I'm not proposing we tax "capital investments". I want to tax wealth, like unrealized capital gains. Because that's where the majority of the wealth is.
2. Why do you equate "capital investment" with "productivity"? If anything, the current situation should show you that record capital investments (in AI, mostly) are completely decorrelated from how the real economy is doing (which isn't great).
3. I never claimed that such taxes wouldn't cause harm to the economy, simply that cutting transfer payments would be much worse and wouldn't be enough to solve anything. We've been doing austerity for 50 years, it's time we think of something better.
If you want a healthy economy, you have to reduce inequalities. Transfer payments are a way to do it, wealth taxes are another. Cutting "entitlements" only worsens the problem.