What ‘The Triumph of Injustice” Means for Democracy

What ‘The Triumph of Injustice” Means for Democracy


I’m gonna turn our attention
to the question of democracy and again that’s the framework
that has brought us here, this evening, the Graduate Center as President Muyskens
mentioned is in the middle of a two-year initiative supported by the Carnegie Foundation on the question of the promise and perils of democracy and the theme for this autumn is what are the current threats to democracy. This book is really, I think,
fits just extremely well in this discussion. So Emanuel and Gabriel
throughout the book you argue squarely that inequities in
the U.S. tax system represent a fundamental threat
to American democracy, the tax system you described
as a system of plutocracy and you note that the wealthy have an ever-increasing capacity
to shape policy making in government for their own benefit. So let’s just take a closer look. In your discussion
beyond the Laffer curve. I think most of you probably
remember from Econ 101 the Laffer curve famously
drawn on a napkin is the curve that’s supposed to tell us which tax rate is going
to maximize revenue. You argue in the book that
deconcentrating inequality may justify designing a tax system that does not maximize revenue. Isn’t that economic heresy, are you gonna lose your
licenses to practice economics and have to become plumbers. How will you defend a tax
plan that is designed not to maximize revenue. What’s the argument in terms of– – We are going to be excommunicated, I think from the economics
profession for that chapter and other things that we do in the book. But we’re doing this for good reasons. And what we’re trying to do in the book is to help the public
reconnect with the history and the tradition of tax progressivity and tax justice that’s been
so important in the U.S. You know you have two traditions and we start the book
by telling this history. there is a strong
anti-tax, anti-government, anti-democracy tradition that’s
largely enrooted in slavery and you see that when you
look at the tax systems of you know Virginia in the 19th century. And there is also a progressive tradition that says look an extreme
concentration of wealth in and of itself is a bad thing. It’s corrosive for society,
for the social compact. And so one of the roles of the tax system, the main role of the tax
time is to generate revenue and for that you don’t want
to be on the wrong side of the Laffer curve when revenue falls, when you increase the tax rate. But another very important
role of the tax system and historically that’s played a big role in U.S. society is to limit
the concentration of wealth. You see that with the
the speech by Roosevelt that I mentioned, you
know this idea that nobody should earn more than a certain income, why what’s the reasoning behind that. The reasoning is that for
most of the population wealth is safety, security is a good thing, but for the very very rich wealth is not safety, wealth is power. And so an extreme concentration of wealth means an extreme concentration of power. The power to influence policy making, the power to influence markets and you want to use the tax system, you might want to use the tax system to reduce this power and
to regulate inequality. And we think that’s an important rational.