There is a solution to gross wealth inequity and poverty, one which will also improve productivity and stir innovation. It is the Single Tax.
Tax the non-manmade resources of the world--land, oil, coal, air & water (when they're polluted)--while untaxing both wages and capital derived from production (This does not include capital from speculative investments). The basic problem is that a few monopolists own the "land" (in the classical Political Economic use of the term), while charging the rest of us rent upon it.
There is a solution to gross wealth inequity and poverty, one which will also improve productivity and stir innovation. It is the Single Tax.
Tax the non-manmade resources of the world--land, oil, coal, air & water (when they're polluted)--while untaxing both wages and capital derived from production (This does not include capital from speculative investments). The basic problem is that a few monopolists own the "land" (in the classical Political Economic use of the term), while charging the rest of us rent upon it.
So, for example, Exxon was able to earn a gross $46 billion in profits because they can charge us rent on oil that had skyrocketed in value in 2008. Did Exxon make the oil that came out of the ground? Did they have an especially innovative year and discover a way to make better oil - oil that would let us drive our cars twice as far? No, they just extracted it. Fine, let them keep all their profits from that production, but the market has put a price on the actual oil itself, which dead plants made, not Exxon, so Exxon should pay all of us rent to extract it. The value of the oil in the ground, it turns out, is by far the largest chunk of their profits. If the People--through their elected government--truly owned the resources like oil, they could charge Exxon, or whomever, to develop it, and there would be a lot of takers even at normal non-speculative oil prices, because the oil companies would still be able to keep all profits from production.
Under a Single Tax, speculation on all natural resources, not just oil, would nearly end, because taxes (or, rent) would prevent it from starting. Land prices would come down to levels that reflect their true value -- because land could not be held by speculators who profit by depriving the rest of us of its use; it would be prohibitively expensive to squat on land while waiting for the price to bounce higher. Then, the average person would be able to afford a home again without going into 30-year hock to the banks.
The banks also, do not own the land; that too belongs to all of us. There is added value in a building, and the owners should profit from that, but try to imagine the most posh, upscale building you can, relocated to central Alaska, and you'll quickly see how little value is in the building itself, and how much derives from land (or, in the Real Estate Agent's vernacular: Location). Land gains value due to the natural increase in commerce resulting from population density, not because this building, or another one, is built there.
These ideas are not new. They date from Henry George's book, "Progress and Poverty," written in 1879. The book remains the best selling economics book of all time, selling 2 million copies - second only to the bible when it came out. There are many online and written resources as well, espousing the Georgist philosophy:
Henry George - Wikipedia
The Henry George School of Social Science
...to list just two of very many sites. Classes are given for free in the Henry George School in New York City, where I am currently enrolled.
We can have it both ways -- high productivity due to the untaxing of labor and capital, while at the same time achievement of social justice, and end to urban sprawl through the reuse of unused land, de-monopolization of valuable natural resources, progressive taxation, and even conservation of the finite resources of the world.
The answer is the Single Tax.