Last weekend, unemployment benefits ran out for 1.3 million Americans who have been out of work more than six months. This week, 13 states will raise their minimum wage. As 2013 draws to a close, the class war rages on. At least one nation on earth has a bold idea about what to do
Raising the minimum wage is nice (and the fact that it is reportedly a staple of the 2014 Democratic Party reelection plan is a good sign that grassroots sentiment is finally making its way to Washington), but it won't do much for people who are unemployed and cut off from benefits. Even the middle class has given up on the mythical American Dream. Just imagine how the lower class feels about it. America, freshly emerged from its recession-induced cocoon of bashfulness, is now a place where a single hedge funder can earn $3 billion a year betting on big banks, while Congress can simultaneously argue that $25 billion is too high a price tag to keep more than a million of our citizens from utter economic despair for the next year. Something's got to give.
In 2012, French president Francois Hollande flirted with the idea of imposing a 75% tax on earnings over $1.2 million per year. This wouldn't have sounded so radical at all to our grandparents, but it proved impossibly socialist in our modern world. A court ruled it illegal. Hollande, however, did not give up—he's now won court approval to have companies pay a 50% tax on wages to individuals above $1.4 million. (In combination with existing taxes, it will still come to about a 75% tax on wages over that level.) It's a corporate luxury tax on salaries. That's super.
CNBC objects that the tax is expected to raise "less than 1 billion euros." In America—where individual hedge funders earn billions in a year—that certainly would not be the case. (Of course, capturing that income properly would mean reforming the tax code to rationally define "income." But what a good incentive to do so!) If CEOs insist upon being paid more than 200 times the salary of their employees, the least we can do is to tax a sensible chunk of that money back into the public treasury.
Perhaps we'd make enough to pay for those unemployment benefits.