The Africa Report - 07 October 2014
The author of Capital in the Twenty-First Century has spurred an energetic debate about capitalism and inequality. Here, he talks to The Africa Report about democracy, markets and industrialisation. The Africa Report: What lessons on inequality are there for Africa from Europe's 20th century?
Thomas Piketty: It's important to think ahead about the kind of
institutions, in particular progressive taxation and welfare states,
that we gradually want to develop in order to ensure that this growth
that will come [in Africa] can be distributed in a balanced manner and
we don't get to the kind of extreme and excessive concentration of
wealth and economic power that we had in Europe up until the First World
War.
In France in 1914, people didn't want progressive taxation, even with
a top rate of 2%. Then suddenly in 1920, the same political groups that
refused the income tax with the 2% tax rate voted for an income tax
with a top tax rate of 60%. This is largely due to the war-related
shocks but also after the Bolshevik revolution in 1917.
Many rich
people in France and in the West thought, after all, maybe it's better
to have progressive taxation than to have expropriation.
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