How might our society show value for the long term, over the short term? Could we think about taxation over time, asks @carlotaprzperez in an interview.
[35:00] Golden Ages are very clearly state-led. When you get a Golden Age, it’s because the state is shaping it. And that means taxing.Perez (2019), Exponential View
Finance has to be taxed properly.
We should have very high taxes for anything, any operation, anything that you earn within one day, with like the Fast Finance, and all of these things, 92% tax. That’s not unique. That happened in the 1950s. So, you get 92% tax for anything within one day, 80% tax for anything within one month, 50% to 60% tax for anything within one year, zero tax for 10 years.
So, you actually get finance to be interested in the long term, because without long term, we don’t have proper innovation.
There’s some supporting information in a 2017 interview.
That is why now is the right historical moment for the government to come back on the scene, boldly, actively and wisely. In a turning point, government is not the problem: government is the solution.
This is what eventually happened from the 1940s. Government action and the Second World War led to mass production and mass consumption. Large numbers of people had access to relatively cheap products. Suburbanization made it profitable for firms to innovate for the family in the electric home with its insatiable hunger for new products. At the same time, the Cold War led to government investment in high tech. The reconstruction of Europe also stimulated economic growth and the demand for equipment and other goods.
The welfare state enabled mass consumption. That’s one reason why high taxes were possible without resistance. The top rate was around 90% throughout the 50s. The money went out of tax-payers’ pockets, passed through the hands of government, and came back as solvent demand for consumer goods or procurement. Firms prospered because they were able to pursue an agreed common vision of what “the good society” looked like and what innovation was needed to make it happen. Everyone was going to have a home with cheap appliances. Credit was available that enabled people to buy houses and goods. It was an intelligent positive-sum game between government, business and society that led to the greatest economic boom in history.Perez (2017) Forbes.com
Carola Perez, “From A Casino Economy To A New Golden Age: Carlota Pérez At Drucker Forum 2017”, Forbes, Nov. 25, 2017 at https://www.forbes.com/sites/stevedenning/2017/11/25/from-a-casino-economy-to-a-new-golden-age-carlota-perez-at-drucker-forum-2017
Carlota Perez, “Bubbles, Golden Ages, and Tech Revolutions”, Exponential View with Aseem Azhar, October 19, 2019 at https://hbr.org/podcast/2019/10/bubbles-golden-ages-and-tech-revolutions