“What is your opinion? “
A government may levy whatever taxes it believes are appropriate. In the past, marginal tax rates in the US were at times as high as 94%.
Yet private sector fortunes were made throughout the 1940s and 1950s with 90% marginal tax rates. That isn’t socialist!
(I’m not advocating a return to 1945 tax levels, but it is clear that high marginal tax rates do not make a society poor.)
‘If you think that supply-side doesn’t work, abolish “free markets.”‘
“Supply side” has been shown repeatedly to work the way its proponents claimed: The government clearly brings in less in taxes when it lowers tax rates. (Duh.)
But more to the point, economists know that free markets are efficient in terms of allocating societal resources only when there is perfect competition and perfect information. They are almost efficient when there is pretty good competition and pretty good information. Today with monopolistic tendencies in many industries, we certainly do NOT have anywhere near close to perfect competition.
Free markets are also efficient only if higher prices result in an increased supply. (This is the real importance of the “supply side” — not the political polemics from the 1980s.) In real estate, health care, and transporation, higher prices do NOT result in increased supply of goods and services. The supply of land is fixed, the supply of health care workers and facilities can increase only very slowly, and it now takes forever to create new transportation infrastructure. Hence free markets don’t work in these areas. Energy infrastructure is probably now in the same category. Another problem is that for real estate, health care, and food, many people simply can’t afford basic necessities. Hence we have government subsidies that distort the markets — but they are essential on a moral level if you don’t want people to be homeless, dying because of lack of medical care, or starving because they are losers in the competitive economy. This is where the Torah breaks with laissez-faire capitalism — we do not stand by while blood is shed! Hence Chazal’s mandate to commual authorities to tax the community to provide for the poor.
In America we desperately try to save the market economy. Hence we have rent controls, Obamacare based on private for-profit insurers rather than a socialist government agency, and food stamps. Israel is smart enough not to try; a government agency owns most of the land in the country and there are no for-profit health insurers.
‘Europe already sees where “semi-socialism” has taken them. ‘
15 of the 20 richest countries in the world are in Europe — and some of the richest have some of the most generous welfare states. See Norway for an example.
‘Capitalism only works well if it’s completely “free markets” and the society has confidence in the system. ‘
One problem today is that American society does NOT have confidence in the system. We assume that the wealthy and influential will plunder everything then use their power to get themselves bailed out. Corporate CEOs squander their stockholders’ equity and get rewarded with huge golden parachutes — and then get nominated (and sometimes elected) to public office.