Willie Sutton, the infamous bank robber, could not have said it better than Hassan Heikal. And Heikal is no bank robber—he’s the chief executive of EFG Hermes, which describes itself as the premier investment bank in the Middle East. But, like Sutton, he kows where the money is—and that’s where he wants to go to ease the austerity sweeping the world, and austerity he does not like and finds disastrous. He has a solution, one that won’t solve all the ills of the world. But, it will take $5-$10 trillion out of the pockets of the wealthiest people in the world and put that money towards halting the massive hurt descending on people because of the austerity obsession.
I caught this in yesterday’s Financial Times. Heikal starts by articulating what some voices—not those obsessed with hammering the people with austerity to pay for the robbery of the last 30 years nor those obsessed in our country with a non-existent debt and deficit “crisis”—have been saying for a long time:
The super-rich have not paid their dues to society in recent years, and more and more of us now know it. The average personal income tax rate on the wealthy was far lower than that paid by middle-income earners. In emerging markets, capital gains and withholding tax on dividends are tax-exempt. In other words, the new breed of super-rich paid no personal tax.[emphasis added]
The bottom line Heikal suggests we know where the money is. The rich have it. Most political leaders do not want to mess with the wealthy—in the U.S., the elite are the source of campaign funds, among other inducements. Heikal suggests a simply plan:
We should impose a one-off global wealth tax of ten to 20 per cent on individuals with a net worth in excess of $10m, with tax receipts going to their country of citizenship.
The aggregate wealth of those individuals – that is those with net worth in excess of $10m – is approximately $50,000bn. Paradoxically they – or I should say “we” – represent fewer than one in 10,000 of the world’s population.
The global proceeds of what I call the “Tahrir Square tax” would be, if levied at 10 per cent, approximately $5,000bn. Europe should receive $1,500bn, more than enough to deal with the European public debt crisis. It would bring down eurozone public debt, excluding that of Germany and France, to below 50 per cent of gross domestic product.[emphasis added]
Of course, I would go with his upper suggestion of 20 percent.
Let’s be clear. This idea will not kill the myth of the “free market” nor will it all of a sudden bring unions to power to stop the class warfare underway. That is a deeper, longer struggle. But, $10 trillion is not chump change. And along with a Financial Transaction Tax, it will begin to reverse the flow of money from the wealthiest back to the people. Slowly to be sure. But, in the crisis we are in now, it’s a start.
Spread the word.
4:04 PM PT: Hi folks: I was traveling to the other side of the planet when this was posted (automatically) and recently landed so will try to get to as many comments as possible.