Frequently asked or anticipated questions

  1. Would the wealth cap need to be applied worldwide?

    Ideally, but unlikely, and not really necessary. Plutocrats mostly, with notable exceptions, meddle with their own country, so a wealth cap in your own country will solve much of the problem. A lot of the rest of the problem can be removed by enacting wealth caps in a few important countries. Consider that, of the 1.6 million people in the world with $10 million or more:

    So there is no need to attempt some kind of worldwide treaty with near-zero chance of success. Most of the problem, worldwide, would be solved by enacting a wealth cap in the USA plus some of the other countries mentioned. In such a world, countries without a wealth cap would remain dominated by their domestic plutocrats, but almost exclusively them.

  2. Would it be complex, slow and difficult to evaluate a potentially-capped person's wealth?

    Many governments tax inherited estates, so there are already evaluation methods considered sufficient, hitherto. The nature of a wealth cap makes this easier than for inheritance taxes or other wealth taxes, too: the wealth "taxed" is not important, but instead the wealth remaining for the person capped. Also, very few people would be evaluated as it should not be difficult for governments to pick likely candidates: if they own one expensive house, or many houses, then they are likely candidates; if they have many shares or bonds, then it is very easy to identify them, if the ownership system is computerized. Plus, anyone spending huge amounts may arouse suspicion.

    Suppose some multi-millionaire, called Bob, was evaluated: he would declare his primary residence, which could be valued from previous sale price or from similar homes in the area -- as for other buildings or land to be kept. Bob's private companies, if kept, would then be valued -- likely the most difficult step; if they were clearly worth more than the level of the cap, Bob may be encouraged to give up the companies entirely to expedite the process, rather than split them. Shares of publicly-listed companies would have a listed price, as for government bonds etc.. Usually, these would round out the remaining wealth after evaluation of large items. Small movable assets, like cars or artworks worth less than $100,000, could likely be ignored, unless numerous.

    Consider also that the first valuation when enacting the wealth cap need not be accurate -- the point is to end plutocratic power, not reliably get revenue. If the valuation is conservative, valuing at $10 million what is actually $12 million, that is fine and can be corrected later.

  3. What would be done with yachts, artworks, antiquities and other trinkets received from a wealth cap?

  4. To win elections, it helps for the message to be aspirational, suggesting that voters could become rich. Would the wealth cap be anti-aspirational?

    "Aspiration" appeals to emotion, so it would not suffice to merely say that the wealth cap level would be very high, though it would be true. However, it could be said that a wealth cap would increase the likelihood of any one person becoming rich. It is intuitive that riches would be more evenly spread, so more people would be rich.

    With a wealth cap, new wealth must go to those not already capped. This assumes that any sovereign wealth fund spends its after-inflation returns (rather than saving to grow faster than national wealth, as large personal fortunes tend to do); and that per-capita GDP and productivity growth (after inflation) will continue. It also assumes no political changes that much affect the working of the economy.

    If a wealth cap causes top salaries to fall due to a decreased incentive for them, then the money will either go to other workers or to investments or to dividends, and so in most cases to uncapped people. If a wealth cap causes more people to retire early from highly lucrative jobs, then there would be more opportunity for others to replace them. It may also be that, currently, middling people are denied opportunities by rich people who use their greater resources to take those opportunities for themselves — that inequality of outcome leads to inequality of opportunity: this effect would decrease.

    Also, a wealth cap would give people a definite finish-line or target to aim for, to aspire to.

  5. Would a wealth cap restrict "freedom"?

    The state traditionally restricts many freedoms, particularly those that restrict the freedoms of others. For example, the UK bans political uniforms, as they can intimidate opposition, and private armies and gangs, as they intimidate people and challenge the power and legitimacy of the state. Subverting democracy via plutocratic power both curtails the freedoms of ordinary people, and challenges the power and legitimacy of democracy and the state.

    Also, property is guaranteed and permitted by the state (allodial title, international law etc. mean that the state owns everything, ultimately) and, in a democracy, private property should exist to the extent that it benefits the bulk of the citizens; concentration of property to plutocrats does not.

  6. Would a limit on inequality reduce work incentives and therefore economic growth?

    The cap would be so high that most people could never hope to reach it, so their incentives would not be directly affected. Even if those capped become entirely idle — doubtful: due to diminishing marginal utility of wealth, they should already lack much material incentive — they are much less than 1% of the population; the economy would cope.

  7. Would a wealth cap deprive the industrious of the fruits of their labours?

    Often, politics involves compromises between conflicting moral principles. This moral principle, that those who work hard deserve the fruits of their labours, may occasionally conflict with the principle of political equality, just as the principle of freedom of speech occasionally conflicts with the principle of protection from harm — this is why many countries have laws specifically against fraud, libel and inciting violence, despite a commitment to freedom of speech.

    Also, very few people will be directly affected by a wealth cap, and fewer still of them would have begotten their extreme wealth entirely through their own labour (i.e. without inheritance, exploitation/rent-seeking, or sheer good luck), so the scale of the compromise would be small.

  8. Would a wealth cap be excessively arbitrary?

    The value would be carefully selected to limit the number of people affected, so the remaining "arbitrariness" would only apply to a very small part of the population, those least vulnerable to arbitrariness in general, while life for most is full of arbitrariness — life is arbitrary — so adding a tiny bit more is not a great problem.

  9. Why not just apply wealth taxes, as Thomas Piketty suggests?

    A wealth cap would be much better for breaking plutocratic power as: