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jjav • today at 8:10 AM • 1 reply • view on HN

It would, that's why a solution needs to be paired with an aggressively progressive tax system. Beyond some point, the tax rate needs to become 100% of all wealth above it.


Replies

jstimpfle • today at 9:09 AM

About progressive taxes. That would make the super rich not super rich. But it would not fix state finances. (Also of course it's not realistic to think that the super rich will just give 100% of their money for nothing in exchange).

If the state needs money, it needs to take it from where it is, which is still with the masses. In Germany, at around maybe 90k EUR income is a particularly bad place to be. You are nominally considered to be a good earner. But at that point you already give around 70% on the next EUR you earn for various taxes and social security. If you are financially responsible not only for yourself but for other people (which is not reflected in lower taxes unless you're legally married), you can still get along fine, but it might not feel like you are a good earner. I was in a similar situation at one point in my life, it had taken me hard work to earn that money, and I have to say I was a little pissed about the tax situation.

I think I understand why progressive tax systems exist. Given our societies' structures, they probably _have_ to exist. But also I wonder if long-term they _contribute_ to income and wealth inequality. It reduces incentives for those who earn less to earn more (which of course for many people is not easily possible, but for some it would be, by working more, working harder, looking for a different job, etc.). It also allows employers to spend less on their workforce, meaning you could understand it as a kind of subsidiary for employers. Of course, lower salaries might be the only way for employers to even offer a product at prices the market wants to pay. But again it also reenforces inequalities in the income structure.