A new gilded age?

Thomas Piketty, Capital in the 21st Century (Harvard University Press, 2014)

A recurring theme in these blog posts has been the effect of technological change on employment, income distribution and return on capital in the coming decades and the implications of these changes for public policy. To summarise the story so far:

  • We are currently entering a period of rapid technological change. According to Moore’s law, which predicts that computing power doubles roughly every 18 months, we are approaching a period where the exponential effects of this doubling will suddenly become noticeable. We can already start to see science-fiction becoming reality in a number of ways, from ubiquitous video conferencing and tablet computers to self-parking and even self-driving cars and computer programs that can perform tasks that previously required skilled human labour (such as legal document discovery).
  • This technological change will reshape ... Read More

Corporate Income Tax

Abolishing the corporate income tax is an absolute no-brainer: in this global age, companies can effectively set their own tax rates, which means that all corporate taxes do is keep capital offshore (and thus unavailable to be reinvested in ways that would generate economic growth and tax revenue). Witness the absurdity of Apple borrowing money to pay dividends rather than repatriate some of its $146 billion cash stockpile (and face the US’s ridiculous 35% tax rate). My tax colleagues needn’t worry, though—a policy this obvious has no political chance of ever being implemented.