Would an 80% income tax be reasonable?

PasturesNew

Here's a lightweight read on factors of success:

https://blogs.scientificamerican.com/beautiful-minds/the-role-of-luck-in-life-success-is-far-greater-than-we-realized/

Are men harder working than their female colleague they sit beside when the female is paid less? No, the men were lucky to be born male. Better looking people are, on average, paid more than those less good looking - they were lucky to have been born better looking!

There's an "edge" that some people have, that others can't replicate ... even if they work MUCH harder.

Prince Harry, no matter how hard he works, can't be King, because his brother was born first. Luck!

Jamie Oliver had a lot of luck - born into a pub-owning family, he had kitchen experience galore and that probably helped him to get a place at catering college (whereas somebody whose dad didn't own a pub didn't have any experience and was turned down). He could then use his dad's name/contacts to get him easily into a job (even if it was just "I grew up in a pub ..... been in kitchens all my life") - and he was "in the south east". But he didn't do anything except happen to shuffle behind another bloke when a film crew were in filming his boss and he caught their eye based on how he looked (more like a surfer than kitchen staff) ... so all "luck" - if he'd been a typical wirey, dark haired, behind the scenes worker they'd have not noticed him. He did nothing. He was spotted on his looks. After that he had the opportunity to do well/better, but if he'd been born as the son of a coal miner in a Welsh village and had even thought about catering as a job and managed to get a job, he'd probably still be in a local pub churning out chicken in a basket.... and working "harder" without the high income.

michaels

I think the idea of applying monopoly theory to individuals earnings could have some merit. We accept that a natural monopoly can lead to 'market failure' requiring regulatory intervention - and even for inventors we limit how long they can benefit from exclusive rights via patents.

Could we apply the same argument to those who are uniquely talented such as at a sport or art - they have a monopoly of being 'the best' or one of the top 100 at what they do?

westernpromise

The flaw in the thinking here is to imagine that if you removed the contribution of the best people, nothing would change. All the creativity and value would come into existence all by themselves regardless of whether Microsoft is led by Bill Gates or Bilbo Baggins.

Absent the right people there wouldn't be the wealth in the economy to pay top earners what they earn.

Nick_C

Nick_C wrote: »

Although I think the lowest earners shouldn't pay tax ...

MobileSaver wrote: »

Everyone working should pay tax if they want to take advantage of any of the public services that the government provides. The problem with 0% tax rates is that you encourage the work shy to deliberately stay under whatever the arbitrary limit is.

I don't see the sense in people on low earnings paying income tax on their wages, and then employing an army of public servants administering means tested benefits to give them their money back. Far better to let them use their own wages, and hopefully appreciate how good it feels to be self sufficient.

I would like to see a smoother transition between 0% and basic rate, so people are not turning down opportunities to earn more money.

John-K_3

economic wrote: »

You earn at least 500k and you are on a money saving site?

Yes.

I was born in a mining village into a working class family, and know what it means to have to choose between eating and heating. That’s probably one of the reasons that I have worked to be where I am now.

economic

John-K wrote: »

Yes.

I was born in a mining village into a working class family, and know what it means to have to choose between eating and heating. That’s probably one of the reasons that I have worked to be where I am now.

What line of work are you in out of interest?

zagubov

I think you're overemphasising the importance of the people who get the credit for moving us forward.

If Edison never lived would we be watching TV by candlelight?

John-K_3

GreatApe wrote: »

With regards to you moving abroad. I don't believe you are likely to do that you already pay 45% so why don't you move to a 0% country today? Also countries can and do limit or impose tariffs on service imports.

Each time I change jobs I consider a whole host of factors. The city I would live in, travel time to see friends and family, wage after Tax, and so on. Importantly, the same decision is made by similar owners who are currently in Geneva, Paris, New York, or Tokyo.

At 80% Tax, do you honestly not see that I would likely take the next job in Geneva, and that staff currently there would not take the job here?

Do you genuinely think that London is so much better than New York that it’s worth a 60% pay cut to choose here?

John-K_3

GreatApe wrote: »

I am arguing that a lot of very high paid people are high paid not because of their skill or hard work but because of some sort of crowd dynamics.

I think that you really need to go away and try to work out exactly what you mean by this, you’ve not explained it well at all so far.

You are aptaking what is a very rare example such as footballers, and trying to assert that it is some form of randomness that makes them valuable, then jumping randomly to saying that therefore they should be taxed.

It is just not yet a coherent argument.

John-K_3

PasturesNew wrote: »

Rarely true. While those things do require some talent and hard work, studies have proven that most people "at the top" were simply luckier than others.

If you dig around 99% of successful people's backgrounds you can spot the "luck".

Ability and hard work are one part - luck is the other, usually meaning they came from wealthy families, or families already "connected", or geographical luck.

Even Bill Gates was lucky ... if it weren't for his mum and her job/contacts he'd have just been "another geek that writes this code stuff". He didn't necessarily work harder than 1000 other people ... but only he had his mum.

I do not believe you, I think that you have just made that up. Can you link to these studies?