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A tax system that tackles income
inequality: The tax system operates just
like it does today, with the highest
rate of tax being about 40%, but with
the exception that every year the
richest person in the country has to pay
99% tax. This will create a powerful
incentive among the super-rich
to be the
second-richest person in the country and
to moderate their income.
[link]
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This sort of thing never works. The super-rich can afford accountants and advisors to create schemes to protect their wealth - or they just become non-domiciled, or move overseas. |
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Also, there is a nasty whiff of socialism about the idea. |
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... makes a note not to post THIS idea in 5 years time. |
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You say this in jest, here's the reality: a person making
over $1M a year as a
self employed individual, and residing in New York City
pays an aggregate
income tax rate of 70%. |
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In addition, he pays (as everyone does) a 13% aggregate
city and state sales
tax on purchases |
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Putting aside the staggering inefficiency of such a system,
and the number of
outright parasites living off it -- government workers
whose general salaries
and benefits are only possible because of this insanity,
what becomes obvious
is that the incentive to avoid taxes is in fact much much
higher than any other
way of growing income, which distorts the entire economy. |
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The real income inequality is between the stock broker
who is making a $1M,
and paying $700k in taxes, and the hot dog vendor who
works by the entrance
to the Holland Tunnel, who is making $1M and paying 70K
in taxes since his
business is cash. |
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// the poor would always be with us // |
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<obligatory Soylent Green reference/> |
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yes, they just disappeared :) |
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I think the fundamental flaw in this idea lies in the assumption that inequality is bad. |
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I am fortunate enough to know quite a few people who are (a) very much smarter than me (b) have much better business acumen than me and (c) have much more money than me. I think that's excellent, and I don't begrudge them (a), (b) or (c). |
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If I were completely broke, then I would want more money - I wouldn't want to punish people who already have more money. In particular, I wouldn't want to unjustly clobber whoever had the most money, just for the spite of it. |
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// I think the fundamental flaw in this idea lies in the
assumption that inequality is bad. // |
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Too much inequality leads to bad things. Inequality itself is
inevitable, and in general a good thing. |
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Don't forget about the private equity firm whose owner
pays peanuts, and the CEO who gets paid in stock options. |
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The system is highly rigged against the working poor.
Keeping it marginally unrigged is the job of everyone. |
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