As I've written before wealth inequality has dangerous side effects, especially in democracies where it leads to plutocracy and military adventurism.
If you missed it before, my 2 cents on the issue: Wealth Distribution Policies not Politics ---- Daily Landscape
The argument that a high marginal tax rate is a disincentive to work is not borne out by any studies I've seen.
In economics, marginal tax rates are important because they determine incentives to increase income; at high marginal tax rates, the individual has less incentive to earn more. In theory, if a 100% marginal tax rate existed, the individual would no longer have any incentive to increase earnings,
There has been debate about the extent to which this influences people, particularly at the more moderate marginal tax rates,,,say 25% to 60%. The Laffer curve argues that lower marginal taxes would actually increase tax revenues. I've never heard anyone debate that at the upper levels of taxation--say 90%. But there is legitimate debate at the more moderate marginal tax levels. Will lowering the taxes from 50% to 45% really make as much impact as Laffer claims?
The Laffer curve does not exist. Even the claim (which you hedged) that people wouldn't work at 100% tax rate isn't true. The "dollar a year men" of prior times worked for nothing. As I said above the fact that money is the motivator of behavior is an assumption, not a fact. Quoting Wikipedia proves nothing. If we had a Wikipedia in Galileo's time it would have stated that the Sun was the center of the universe. Sometimes common wisdom is just wrong.
Here's my little essay on what's wrong with the concept of the Laffer curve, if you're interested.
There is no Laffer Curve
However, this is a distraction, the real issue is that wealth maldistribution has bad effects. This is not theory, this is simple observation. Those societies which have the worst imbalances are the ones which suffer more from a variety of ills. These include a disproportionately high under class with all its associated problems of poverty, crime, ill health and poor education and job prospects.
In addition wealth inequality leads to social policies which favor the interests of the rich to the detriment of society as a whole. One can look back at the Sun King as a typical example, but there have been many others from biblical times to Zimbabwe.
Why the libertarian arguments continue to get any notice and why those who don't benefit remain supporters is a continuing mystery. As things stand in the US, for example, if you are earning less than $200,000 and/or have a net worth of less that about $2,000,000, present policies are working against your interests. One can excuse those at the Cato Institute and similar venues, they sing for their supper, but the number of just plain working stiffs who fall for the elitist, authoritarian story of the libertarians is remarkable.
Perhaps they think they are smarter than average and can game the system to their advantage. Perhaps some are, but social mobility has decreased in recent decades and the likelihood of coming out a winner has declined. So being against the estate tax, for example, because you think you might be subject to it when you strike it rich, is just self deception.
As I've said before, some people just need to believe whether it is in religious or economic dogma and arguing with them is futile. Unfortunately for the rest of us when the deceived get into positions of power the results can be disastrous, reality can be ignored, but it can't be denied. Policies not Politics ---- Daily Landscape
In economics, marginal tax rates are important because they determine incentives to increase income; at high marginal tax rates, the individual has less incentive to earn more. In theory, if a 100% marginal tax rate existed, the individual would no longer have any incentive to increase earnings, Some people might work if all of their additional earnings went to the government, and they received no financial benefit. But for most, this would significantly change the decision between work and leisure, and they would not work the extra hours, or cut back hours, if 100% of those additional monies would go to the government.
But you certainly have the choice of not believing this.
I won't comment on the Laffer curve because you misrepresent what I said.
Have a good day.
