taxing the wealthy -- 8/12/16

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Today's selection -- from Chester Alan Arthur by Zachary Karabell. In his recent best-selling book, Capital in the Twenty-First Century, economist Thomas Piketty makes the case for growing global inequailty, and suggests a tax on wealth (rather than income) as a remedy. It is not a new suggestion. In 1879, faced with the growing inequality of America's gilded age, reformer Henry George, also a best-selling author, made a similar proposal:

"By the 1870s, [New York City] had nearly a million inhabitants, though no one knew for sure exactly how many immigrants lived in the tenements and hovels that spread out from Five Points east of the Bowery and south of Cooper Union. There, as many as 250,000 people were crammed into a square mile. Sewage ran in muddy ditches through the narrow streets, and people competed with horses and carts and usually lost. Navigating through the labyrinth was a constant chal­lenge, and it was easy to get lost in the dark of night. The mix of animal feces and human waste was a recipe for disease, and New York had the highest death rate of any city in the Western world.

Henry George at 26, American political economist.

"The only common ground was Central Park, which was not yet complete in the 1870s but which would soon become the city's melting pot. When he was collector, [future president Chester Alan "Chet"] Arthur passed near to the tenements to get to his office at the customhouse, but it's not clear that people of his class really noticed how most people in the city lived. Arthur's home and Delmonico's were less than a mile north of the tenements, but they were a world away.

"In the city and throughout the country, trade unions were just beginning the struggle to carve out a larger slice of eco­nomic rewards for workers. Women were starting to question the limited scope of their political rights. Railroads were criss­crossing the continent, making a steel baron named Andrew Carnegie richer than all his Scottish relatives combined and a few New York bankers wealthy and most investors very, very poor. ...

"The country had nearly 50 million people, and while some gloried in the rapid changes, many felt dislocated. Reformers looked for things to reform but often despaired that they were tilting at windmills. Henry George, the best-selling author of Progress and Poverty (1879), proposed a single tax based on land ownership that would redistribute wealth away from the 1 percent of the population who owned more than 90 percent of the country's wealth and offset the destructive imbalances caused by the yawning gap between rich and poor. George was especially troubled by the corruption and sprawl of urban America and asked a friend what could be done. 'Nothing,' his friend replied, 'you and I can do nothing at all. We can only wait for evolution.' That was not a satisfying answer, but the prospects for change seemed daunting. Every night, the gilded elite gathered at Delmonico's to declaim against the likes of Henry George. It was their world, and one of its stewards was Chet Arthur."