Taxation: Higher taxation of "extortionate income"

There are various classifications of income subject to various levels of taxation as with capital gains or the ingenious lengths people will go to avoid classifying their income as income at all. The other goal of the tax system is to promote or retard behavior deemed desirable or detrimental to society, respectively. Of course, there's a lot more to the tax code and regulations, don't get me started on stuff I don't have the wherewithall to hire lobbyists to bribe politicians to put in the tax code.

Let us start by defining a type of income to be called "extortionate income" or "EI". EI would be that income which is derived from nonconsentual activity between people. Examples of EI would be any compensation paid to anyone out of taxation receipts such as a government official's salary or benefits. This "forced share" is backed by the force wielded by the State in arresting and punishing those who don't pay taxes "voluntarily" . An extension of this concept would include all income derived from State sponsored and private monopolies as EI where citizens have no choice of product or price in whole or part but that prearranged without their consent. On the other hand, income derived from activity where both parties freely consented would continue to be taxed as "normal income." It may be that the profits of a transaction may yield both EI and NI each to be taxed accordingly.

Of course, high taxation of IE is not to say these nonconsentual activities could not continue, we are simply using social engineering to discourage them as we would discourage smoking or the purchase of beverage alcohol. "If you tax something, you get less of it. If you subsidize something, you get more of it." Naturally, no adjustments, deductions or bracketing should be allowed EI.

To be sure, there are objections that those enjoying extortionate income would simply act to raise the amounts paid them in order to afford the higher tax. This could be addressed over time by upward adjustment of the tax rates. Note that governments don't pay income tax but its agents and clients do. Some kind of income tax form check off could be enabled to allow those who think they consented to an instance of EI, increasing their individual tax liability, the aggregate of which would go to reducing the overall rate levied upon EI. Those revenues from the higher taxation of EI would, in turn, be applied to reducing the tax upon normal income to the extent that the EI tax exceeds that on NI.