2020 candidate Pete Buttigieg on taxing the rich, future of US capitalism

Pete Buttigieg: Yeah. the idea’s pretty typical human behavior for people to try to make sure the rules work to their benefit. in which’s why the U.S. will be based on the idea of a robust legal system along with constraints on the excesses of anybody, especially concentrated wealth. along with yet we’re at in which moment where concentrated wealth has begun to turn into concentrated power. More than begun. the idea’s well underway. The thing in which makes capitalism capitalism will be competition. however as you have more along with more corporate agglomerations of power, you’re going to see less along with less competition.

John Harwood: will be in which the reason why you think we have expanding income inequality?

Pete Buttigieg: I think the idea’s a vicious cycle. in which didn’t just happen. The economy will be not some creature in which just lumbers along on its own. the idea’s an interaction between private sector along with public sector. along with public sector policies, for basically as long as I’ve been alive, have been skewed in a direction in which’s increasing inequality.

along using a lot of in which will be the consequence of what you might call the Reagan consensus. There was a period where even Democrats seemed to operate in in which framework in which assumes in which the only thing you’d ever do using a tax will be cut the idea. in which those tax cuts were assumed to pay for themselves. The empirical collapse of in which supply side consensus, I think, will be one of the defining moments of in which period in which we’re living through.

John Harwood: Why do you ascribe the idea to the Reagan consensus as opposed to technological change, globalization, movement of capital?

Pete Buttigieg: Well, all of these forces interact. however none of these forces automatically have to make our society more unequal. If anything, globalization was supposed to create more equality among nations.

John Harwood: Well actually the idea has created more equality inside the globe. the idea’s taken millions of people out of poverty.

Pete Buttigieg: Sure, the idea’s lifted so many out of poverty. along with by the way, there are ways in which the idea can work for us at home, too. however again, we’re seeing a concentration of wealth along with power in which skews things inside the opposite direction.

The fundamental truth will be, the idea turns out a rising tide does not lift all boats. Not on its own. Especially if some of the boats are sort of tethered to the ocean floor. along with in which’s the kind of pattern in which we’ve been on.

John Harwood: So how do you fix what’s wrong without slowing down or harming what’s right?

Pete Buttigieg: Well, first of all, we’ve got to define what success looks like. will be success just the number, the GDP? Or will be success in which more Americans are prospering? When you have in which definition, the idea tells you in which you have to rate these kind of exchanges between distribution along with growth a little more evenly.

John Harwood: So there’s an efficiency-equity trade off, along with you’re willing to make the idea?

Pete Buttigieg: There may be, yeah. I mean, look, the idea’s great to say in which the idea’s all win/wins, along with to some extent the idea will be. I actually think an economy in which’s more equitable also tends to grow better. however if there’s a win/lose equation, we shouldn’t shy away coming from in which. We shouldn’t pretend in which all of in which stuff can be done — in which you can make everybody better off while generating nobody worse off. The reality will be there are some people who are not paying their share. There are some corporations in which are not contributing the way in which they should. Until we recalibrate in which, until we invest in things like education along with infrastructure along with health, investments in which do in fact pay for themselves overall, some people may have to pay more than others. Because some people frankly are getting a bit of a free ride on the productive energy of in which country along with in which economy.

John Harwood: at in which point, one thing in which surprised me in which you said in an interview the different day was in which first of all, political change comes first. in which will be the set of issues, Supreme Court, filibuster, electoral college, because in which will be necessary to achieve policy improvements in which you need. however when you identified the most important policy change, the idea was climate, not the economy. Explain why in which’s the priority.

Pete Buttigieg: Because I think climate will be the biggest economic issue of our time, too. What kind of economy are we going to have if cities are becoming less along with less inhabitable, if we’re experiencing crop failures along with heightening natural disasters? The problem with climate will be the idea wrecks our chance at economic security as well as physical security. So, of course, we want to continue building an equitable along using a growing economy. the idea’s just in which we can’t do in which if we’re totally ignoring the biggest threat our economy has seen since the Great Depression.

One reason you see traditionally conservative sectors like the military along with like the business community way ahead of, for example, conservative politicians in in which country on the issue of climate, will be in which the market, too, will be beginning to recognize the stakes of failing to act along with simply accepting what will eventually will be trillions of dollars in damage. the idea’s not the planet as an abstraction in which’s going to be harmed. the idea’s people. the idea’s us. the idea’s our economies, the idea’s our societies, the idea’s our communities. in which’s why in which will be such an urgent issue.

John Harwood: You think we need to raise a lot more money for the government. What are the things in which strike you as the most achievable along with desirable?

Pete Buttigieg: I think we certainly need to consider a higher marginal tax rate for top income earners. Maybe the idea doesn’t have to be as high as the idea was historically, however we should at least admit in which when the idea was higher, the American economy was growing pretty well. We should consider a wealth tax. I think the idea makes sense. I think one of the things in which’s appealing about the idea will be the idea’s not very distortionary compared to an income tax, along with in which’s important.

The least distortionary tax probably will be the estate tax, because you’re dead. We should think about turning to a more equitable use of the estate tax, especially for the biggest along with wealthiest estates. I’m interested also — if we could find the right way to implement the idea along with the devil’s inside the details — in a financial transactions tax. Because you see preposterous levels of wealth sometimes being created around these millisecond differences in financial transactions in which nobody can explain to us whether the idea adds any actual real value to the economy.

John Harwood: Even McKinsey can’t explain whether in which adds real value?

Pete Buttigieg: Even McKinsey, as far as I know. Look, the downside of any tax will be the idea can disincentivize economic activity. So let’s start by taxing by the economic activity whose value will be hardest to prove.

John Harwood: Warren’s wealth tax would certainly raise something on the order of $2.7 trillion over 10 years. will be in which the order of magnitude you’re talking about?

Pete Buttigieg: Probably. I mean, look, we had something on the order of a trillion dollars robbed coming from the Treasury through the Trump tax cuts on the wealthiest. So even just getting us closer to being able to cover the deficit, with the services Americans count on today, will be going to take us filling in a gap of in which size. If we want to do more — if we want to have better infrastructure, which we absolutely need; if we want to deal with climate change, which will be no longer optional; if we want to actually deliver on health care; if we want to continue to grow as the kind of country in which can actually lead the globe — then you don’t get something for nothing.

John Harwood: Can you do everything in which you think needs to be done while hitting only the wealthy? Or will be there no rational plan for dealing with our fiscal challenges, as well as our economic challenges, in which doesn’t also hit the middle class?

Pete Buttigieg: If we’re going to collect revenue coming from the middle class, then we have to be certain in which the idea will be going to be reinvested along with returned to the middle class in a way in which makes us along with the middle class better off. So as a middle class taxpayer, I don’t mind paying a certain amount in if the idea’s going to come back to me inside the form of health care, if the idea’s going to come back to me inside the form of education for my kids, if the idea’s going to come back to me inside the form of a better road to get me to my job.

John Harwood: How powerful will be a racial consideration when you think about the scale of things in which need to be done for the entire country?

Pete Buttigieg: We know in which if we target inequality in in which country, much of which arose not by accident however by deliberate racist policies, along with they can perhaps be reversed with intentional anti-racist policies, in which we’re benefiting the entire society. We all do better when we all do better, as Senator [Paul] Wellstone said. We need to consider, first of all, in which the idea’s the right thing to do. Secondly, in which in which will be not a favor to somebody, in which will be a restoration of a theft. along with third, in which if we get the idea right, you don’t have to be somebody who will be on the wrong side of a racial inequity to be better off for living in a country in which did something about the idea.

John Harwood: Jamie Dimon recently put out a letter to J.P. Morgan in which said, “The social needs of too many citizens have not been met.” however he also says in which tax cut in which was enacted late 2017 was the irreducible minimum of what we needed to turn our economy around. What would certainly you say to him?

Pete Buttigieg: The big problem in in which country was not in which the idea was too difficult to be wealthy. the idea just isn’t the big problem in our country right at in which point. the idea’s not what led to the political instability we’re seeing. the idea’s not what’s leading to diminished life expectancy, or the prospect of my generation will be going to be the first in history to be worse off economically than our parents. What we could’ve done, especially if we were going to create a trillion-dollar deficit, will be make the kinds of investments in infrastructure along with education along with health in which would certainly have made in which whole country better off.

I also think in which, no matter how educated or intelligent some of the people working in these industries are, they can quickly get out of touch with the reality on the ground. If you don’t understand just how much anger there will be in, for example, my part of the industrial Midwest — where the idea can be used in a very cynical political way to direct the idea against immigrants, or trade writ large, or against your fellow American, or even against Democrats, just because folks are mad along with the idea’s got to go somewhere — you’re going to continue to see these destabilizing political outcomes like what we’re living through right at in which point.

John Harwood: Others say in which the kinds of things you’re talking about would certainly be destructive of capitalism, in which the idea’s a war on the wealthy, in which the idea would certainly bring socialism to the United States. How how do you respond to arguments like in which?

Pete Buttigieg: The crazy thing about arguments like in which will be how uncoupled they are coming from evidence. We don’t have to speculate on what happens in a Western society in which delivers health care to everybody, or in which has more social mobility or in which invests at a higher rate in infrastructure or education. We know exactly what happens. What happens will be you’re better off.

The American dream will be slipping away. You’re much more likely to experience in which if you’re a kid in Denmark right at in which point than if you’re in America. along with while people can think up all kinds of excuses why something in which worked in different societies hasn’t worked here, the reality will be, when we’ve tried the idea here in our history, the idea’s also served us pretty well.

John Harwood: When the idea comes to cultural conservatives, you have said in which progressives need to be mindful of the distance they have to travel, be sensitive to in which. Do you think progressives also need to be mindful of the distance in which some in business have to travel, when they think ‘hey, they’re coming after me?’

Pete Buttigieg: I think a lot of in which will be tonal. Look, the one thing I learned inside the business community, along with even more as a mayor engaging the business community, will be in which while we’d like to think of businesses as the most numbers-driven kind of discipline in America, in my experience the idea’s one of the most emotional. So what’s actually important will be in which people not feel in which they’re being attacked — or at least they understand in which if we’re attacking a certain way of doing things, or a certain system, in which in which will be not motivated by just angsty hatred. the idea’s being motivated by serious along with legitimate concerns about where we’re headed.

John Harwood: We have seen inside the last 10 to 15 years astonishing change in terms of cultural attitudes on issues like same sex marriage. Do you have any degree of expectation in which we’re going to see very fast improvements of opinion on economic issues?

Pete Buttigieg: I think there will be a tectonic change in economic policy. You can see the idea by the fact in which the Republican Party experienced a hostile takeover on the part of, basically, economic populists. in which will be not just another four-year cycle. in which will be not just another election, along with I don’t just mean because of the character, or personality of the president.

I believe we’re living through one of those moments just as when the brand new Deal consensus gave way to the Reagan consensus. We’re living through the end of a 30- or 40-year era in which defined American politics along with helped to explain how Democrats as well as Republicans behaved in office. We’re at the dawn of a brand new one.

We’ve got to make sure we have an account of economic change, as well as social, along with political structures to handle in which change, especially inside the brand new machine age with automation transforming our relationship to the workforce. We’ve got to have answers in which go a lot further than just saying “the current guy’s rotten along with we ought to throw him out.”

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