Confiscatory marignal tax rates encourage smart people to become (lower-paid) teachers and scientists rather than (higher-paid) bankers and lawyers, because the pay disparity is substantially reduced.

And society benefits a heck of a lot more from great teachers than from great corporate counsel or phenomenal bankers.

And when a CEO has the same take-home pay on a $10m or $100m nominal salary, they're much less likely to quibble over $50m vs $150m — leaving much more to pay the rest of the firm. And those extra dollars are much more important to workers than to bosses.


These sorts of changes reduce the overall tax base — which is a common criticism of confiscatory top tax brackets. But having teachers instead of bankers and paying workers more compared to CEOs is much more valuable to society than those dollars would have been as taxes.

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