Wealth tax and MMT provide policy architecture needed for greater equality

While the accounting literature tends to focus on the tax avoidance strategies and schemes of corporations, little attention has been paid to similar strategies used by individuals (, ). To explore the case for individual wealth taxes, we make a number of assumptions based on prior literature from contemporary economists such as Piketty, Saez, and Krugman. Specifically, we understand wealth taxes to have powerful redistributive effects () and that with proper foresight, a wealth tax is relatively easy to design and administer (). We argue that a wealth tax could be used in combination with Modern Monetary Theory (MMT). Together, these provide the policy architecture needed to promote a future founded on principles of greater equality, sufficient levels of economic security, and a commitment to enriching the public store of wealth in collective assets and shared services. We will go into detail later, but for the purposes of introducing our argument, it is important to note that MMT assumes that fiscal deficits underpin a healthy economy, and that in any country that controls its own currency the government can create all the money it needs to fund itself. In so doing, both the role of tax and borrowing can be fundamentally reconceived. Importantly for the arguments in our paper, in mobilising MMT it is possible to avoid a future under which the extraordinary levels of public spending needed to combat the effects of a crisis are funded by austerity measures or levying additional taxes on low to middle-income earners (). And in freeing tax policy from revenue raising concerns, MMT means that the use of tax as a policy instrument can be directed towards moderating the many social and political inequalities arising from growing economic inequality. If we assume MMT provides a logical and actionable foundation for understanding modern money and how the state funds its programs , then we suggest that MMT can provide the foundation for new thinking about taxes and their role in creating a just society and creating the conditions in which policy emphasises and reproduces our “communal spirit” ().