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Ok... I might be completely off base here, but why can't we increase taxes on mega-earnings, AND refactor tax laws such that startups are incentivized? Eg, you

Ok... I might be completely off base here, but why can't we increase taxes on mega-earnings, AND refactor tax laws such that startups are incentivized? Eg, you spend 4 years bootstrapping a business while taking a bare minimum salary and then, through whatever mechanism, are ready to 'cash out'. Why can't we look favorably upon people doing this and apply some kind of retroactive benefit to their earnings, taking those 4 years into account? I don't understand why tax laws are applied evenly (in theory...) across industries. If you make a product that effectively poisons the masses (tobacco, prescribed opiates, watered sugar), resulting in huge negative health outcomes, why aren't those profits taxed unevenly? Do we not need to fix those problems then in the health sector? Humans are irrational, ads are made to take advantage of the bugs in our decision-making code, but it's all on the victims to take care of themselves? Something they've already demonstrated to be incapable of doing. I'm sure there are intractable problems with this approach that I'm simply unaware of... but it seems better than what's on the table. We need taxation with an ethical component. Make unethical behavior un-profitable.

devinhelton 11y ago
You could try to design the tax code to try to distinguish people who were getting rich from zero-sum games, versus those who were getting rich from taking risks and creating wealth. In practice, there is a lot of subjectivity in doing so, and it would make taxes more complicated and unpredictable. In general, the more subjective and complicated government policy is, the more room there is for powerful and unscrupulous entities to manipulate the system to their own benefit. Complexity almost always favors the parasites.
prostoalex 11y ago
How is that different from a hedge fund manager not earning much for a few years, but then hitting a big liquidity event? I think the assumption here is that a lot of people with eight-digit incomes choose to continue participating in the workforce, but I don't know if there's data to support that.

devinhelton 11y ago

You could try to design the tax code to try to distinguish people who were getting rich from zero-sum games, versus those who were getting rich from taking risks and creating wealth. In practice, there is a lot of subjectivity in doing so, and it would make taxes more complicated and unpredictable. In general, the more subjective and complicated government policy is, the more room there is for powerful and unscrupulous entities to manipulate the system to their own benefit. Complexity almost always favors the parasites.

prostoalex 11y ago

How is that different from a hedge fund manager not earning much for a few years, but then hitting a big liquidity event? I think the assumption here is that a lot of people with eight-digit incomes choose to continue participating in the workforce, but I don't know if there's data to support that.