Highly recommend reading Pikkety's "Capital in the 21st Century". The gist is this:
- Historically, capital grows faster than the economy at large (generally around 5% annually)
- Steep marginal tax rates help disincentivize high pay (e.g., if the top marginal rate was 90% like it was during the Eisenhower administration, a corporation would see much more of its money go to employees if it gave its lower income workers raises vs giving its exec team bonuses. The purpose of raising taxes on the über-rich isn't necessarily to generate revenue, it's to set up incentives to narrow income disparity, by forcing corporations to distribute money efficiently.
- High top marginal income taxes coupled with a steeply progressive wealth tax would also disincentivize hoarding of capital, and would further "squeeze" the wealth distribution to less problematic levels.
Another key takeaway I think is that we're just returning to the norm. The middle to late 20th century was an outlier thanks to the World Wars and all the destruction in Europe that happened because of them.
- Historically, capital grows faster than the economy at large (generally around 5% annually)
- Steep marginal tax rates help disincentivize high pay (e.g., if the top marginal rate was 90% like it was during the Eisenhower administration, a corporation would see much more of its money go to employees if it gave its lower income workers raises vs giving its exec team bonuses. The purpose of raising taxes on the über-rich isn't necessarily to generate revenue, it's to set up incentives to narrow income disparity, by forcing corporations to distribute money efficiently.
- High top marginal income taxes coupled with a steeply progressive wealth tax would also disincentivize hoarding of capital, and would further "squeeze" the wealth distribution to less problematic levels.