I'm not coming up with any society-wide detrimental effects
I think this gets to the heart of the disconnect on these issues.
The general principle (tell me if I’m wrong, I don’t want to put words in your mouth) is that these people have more than what they need to satisfy all their needs and most of their wants…so what’s the harm in taxing more away from them for social good?
There is no downside to even consider. It’s all upside.
What do you think might happen?
What do high-income people do with their money? Assuming they aren’t hiding it under the mattress, they’re using a lot of it for capital investment…which is what separates thriving countries from stagnant ones.
It’s the #1 factor in the US having a per capita ppp of $89K and, say, France having a per capita ppp of $67K.
Taxing high incomes at a higher rate not only leads to those people taking steps to avoid or minimize the tax, it also reduces the funds available for capital investment - or diverts them elsewhere.
Capital investment is something that benefits many other people directly and society at large indirectly.
Alternatively, funds held in savings accounts serve as liquidity for banks to lend.
Even the money used for consumption creates jobs (think: Gulfstream) that might otherwise be fewer in number.
Would your concerns offset the benefit of making SS solvent without cutting benefits for the lowest among us?
Well, I don’t know. That’s a complicated question. One thing I’d say is that I don’t think any SS reforms are going to have an impact on people with the lowest incomes. They aren’t the source of the distress. The bulk of the liabilities are for people with moderate and high incomes.
But my point in asking the question is not to argue that the tradeoff isn’t worth it. It’s just to establish that there is a tradeoff — and one that goes beyond “aw, poor little rich guy can’t afford to buy a bigger yacht so that somebody else can have clothes and heat.”
And I asked it because I’m starting to gather that, like you, a lot of people don’t really see any downsides to higher taxes on people with high wealth/income.
