Wrong Theory / Destructive Program – Part II
Keywords:Thomas Piketty, Capital, Savings, Inequality
The author exposes the blatant misconceptions of Piketty, among which he points out that what keeps the net savings and net investment it is not a time preference in continual decline and, but instead the increase in the quantity of money and the in volume of spending. He argues that the time preference may indefinitely remain unaltered while net savings and net investment continuously follow along the unchanged time preference, simply because the increase in the quantity of money and in the volume of spending is increasing the cash income. He shows that Piketty, by suggesting to prevent the accumulation of capital through income tax rates of the magnitude of 80%, is actually proposing the destruction of the accumulated capital, by taxing it to the high rate of 10% per year.
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