Ronald Reagan was famously impacted by the 90% marginal tax bracket. He said that he made enough pictures to get up to the 90% threshold, then quit working. He didn't turn to the black market (where he couldn't have made money nearly as quickly anyway). ...
I'm not keen on making generalizations from one individual, especially one with a strong opinion on the subject.
Nobody has suggested "totally redistributing income". I don't think the OP set a number, I'm guessing something like a 90% bracket starting at $1 million annual income.
it was in your example that "everyone was so disincentive-ized" not in my original post. ... i didnt suggest a tax code such as you suggested.
I know - that is why I specifically said "
I sometimes find it helpful, for illustration purposes, to take something to it's extreme.". I thought that made it clear that I was not assigning this to you.
well then lets take a look at the other part of your response
....
i notice that your view is that if the people who sold CDOs and CDSs lost the incentive to sell alot of them they would turn to a life of crime to satisfy their greed. well i have 2 points - 1) i don't believe....
OK, don't believe it, but I think you are ignoring history, psychology, and the basic economics of supply/demand. They might not turn to 'crime', but they may find the next legal loophole to slime through, just as they did earlier. And greedy people can adapt to new loopholes faster than a slow-moving Congress can repair them.
you also compare them to alcohlics which i also find a poor comparison since i dont believe that the majority of the people selling CDSs and CDOs have such a problem but if they have an addiction to greed akin to an alcoholic then they need to get help overcoming their addiction.
my bottom line answer to your greed argument is that i think it isnt something they have no control over and i think most people self regulate their greed, meaning they wont break the law to fulfill it.
Well, I'd bet that many of them *do* have an 'addiction to greed'. And they will find the next path there. Why do people like Madoff keep running a scam after they have more than they could possibly spend? Yes, I think it is an addiction to greed, power, ego, etc.
I am opposed to higher taxes. As others have said, taxation is a blunt instrument which punishes the innocent and the guilty alike.
This is the biggest point, IMO. It just seems wrong to say that some behaved badly, so let's limit everyone, good or bad. Plus, I do believe the negative consequences would outweigh any benefit of a few that might give up their evil ways.
I think the problems of people being able to take risks with other peoples money could be better solved by more direct means, a few were called out earlier in this thread and a few countries given as examples of sounder systems.
I have to wonder how you would feel about this if you were an entertainer or athlete making Million$ for maybe a few years. Would you think it OK that the govt took 95% of your earnings, because somebody else acted badly?
-ERD50