This is a new policy which should be "inevitably" introduced to this globalised economy. As the economic activities of individual economic agents have become so globalised that richer individuals transact their income and wealth across national borders frequently. Therefore, taxing rich has become more complicated and the income tax organised by one nation is not able to tax on richs' income efficiently. If individuals have freedom to move their wealth across the border, the nationally based tax system is not longer able to tax on their income efficiently and even fairly.
Furthermore, managements of the public goods (natural resources, environment, and very externally contingent industries such as nuclear technology and air traffic) have become globalied as well. It seems to be more necessary to manage these public goods usage and distribution in a globalised scale than national scale than the past as the economic activities are globalised more than the past. Therefore, there needs a public fonding resource based on a global scale i.e. Tax by a global institution to spend for global public goods.
Some monetarist zealots may claim that this is a socialist system which disturbs an equity of rich individuals. Nonetheless, if they blame this introduction of the new policy as a socialist idea, we also should abolish the progressive income tax based on national and regional scale. If they supported the complete abolition of tax system, government, public sectors, corporations, and nation states, I would agree with them. However, as long as they still stick to keeping these institutions in our community, the claim against the global wealth tax is not convincing.
I believe the progressive income tax is a necessary evil. As the world now still requires us to tax system, government, public sectors, corporations, and nation states to maintain a healthy usage of public goods, we inevitably need the progressive tax at the "minimum but optimum" level in order to be able to manage the public goods well. The income tax is the unfair tax, but the most efficient tax to take it by means of marginal propensity of saving. It is a macro economic issue. The richer individuals tend to split their disposable income into saving which does not goes into the economic stimulus. By contrast, the poorer tend not to be able to split their disposable income into saving. So, the higher income tax on richer is less likely to reduce their income expenditure into economy and reduce their utility by taxing on their income. So they are more likely to maximise their utility at the given disposable income level after the newly increased income tax. On the other hand, the higher income tax on poor reduces their income expenditure into economy and reduce their utility because their disposable income is reduced from the level maximing their utility.
As a matter of fact, the introduction of the Global Wealth Tax may reduce the bureaucracy rather than keeing the income tax collection based on national and regional level. It would be easier to tax some rich individuals transacting their wealth across the national borders than national governments cover the cost of scrutnise how these rich individual keep their wealth. This new tax also keeps the cost for rich individuals to move across countries by means of the different tax systems and the credit rating in each different countries. It will be possible if the introduction of the Global Income Tax system enables them to exempt from national income tax and maybe regional income tax as well. The middle and the lower income individuals will be taxed nationally and regionally, but the high income individuals should be taxed globally and exempted from paying national and regional income tax, or exempted just from national income tax and still paying regional income tax. The global economic institution should then distribute the Global Wealth Tax revenue to both the expenditure for global public goods and the government expenditure for national government and regional local authorities.
J.M. Keynes was actually the savor of capitalism because he said that, as capitalism grows, the wider scale of intervention becomes inevitable like establishing the IMF in 1944, and establishing the EMU in 1990s and 2000s (and possibly the European federal government). This is a next step of what J.M. Keynes described about an evolution of the global economy. I definitely think this global tax on rish is rather a capitalist idea. The reason why is that in order to make a process more efficient, fair, and effective, the progressive tax system has to be revised and evolved in order to sustain capitalism.
If we support capitalism going on, we inevitably need to support introduction of some globalised public economic system. Otherwise, the negligence of introducing a new global based policy causes instability of economies in this globe, causes economic catorophe, and then rising socialism. In order to stop socialism rising, we must adapt the inevitable global public policy and the institution controlling over it. Capitalism is only one most liberal alternative economic system which distributes the highest sum of utility as much as possible. Socialism and Cultural-Conservativism, the counter-part of Capitalism = Liberalism, are the opposite: retarding, supressing the sum of utility, and idealised system ignoring the natural geometry of market mechanism which inevitably exists in our living world. Hence, the monetalists' and bandit libertarians' objection against the new global capitalist order may help socialism and cultural-conservativism coming into the power. Capitalism inevitably evolves, and we must adapt into the new order following this evolution process as Prof. J.M. Keynes taught us...!
