If you're really concerned with wealth inequality, here's how to ameliorate it

Kevin Williamson at NRO joins the list of those chiming in on the Piketty book.

He says that rather than the global tax Piketty proposes, if one is interested in doing something about wealth inequality (which doesn't much interest Williamson, nor me; it's actually a constant of the human condition rather than a burning issue), reform Social Security:

Professor Piketty estimates that the return on capital over the coming decades will be between 4 percent and 5 percent; historical returns to equity investments run about 7 percent, but let’s be conservative and split Professor Piketty’s estimate, assuming a 4.5 percent return. And in keeping with the first theorem of English-major math, let’s replace that 12.4 percent Social Security tax with a poet-friendly 10 percent. Investing 10 percent of your income at a 4.5 percent return over the course of a 45-year working life produces a higher income in retirement than you enjoyed in your working life, regardless of your income level. It’s true if you make $10 an hour or $10,000 an hour. Example: Assume you make the modest sum of $20,000 a year and never get a raise. You invest $2,000 a year at 4.5 percent for 45 years and end up with just over $300,000, which, taking the most risk-averse course, can be converted into an annuity paying $1,800 a month, more than you made in your job. In fact, by the end of your working life, the returns on your investment — just the returns — would add up to about 70 percent of your salary. Start working a few years earlier or work a few years more, and the numbers are even better, enough to have a substantially higher income in retirement than you had when working.

Professor Piketty rejects such investments, citing the volatility of investment income. (As several critics have pointed out, he gives scant consideration to the risk of holding capital when considering the question of inequality, which is odd: Returns on investments are the payment one receives for bearing risk.) He writes: “For a person of sufficient means who can wait ten or twenty years before taking her profits, the return on capital is indeed quite attractive.” And it’s even more attractive at 45 years or 50 years, which is precisely what we should be encouraging.

But, of course, there's nothing in a scenario like that for the grievance hucksters.