No doubt it’s reasonable at least to ask whether even this small tax increase would make entrepreneurs less productive. But doesn’t this question obscure the fact that, by an overwhelming margin, the wealth and income we should be targeting originates in the non-productive—ie, the financial—sector? The financial sector’s share of both profits and total output soared in the last few decades, without creating anything like corresponding social wealth. Perhaps the fairest and most efficient tax policy would be to leave all non-financial workers and entrepreneurs alone and instead confiscate all income (including capital gains) over $250,000/yr. earned in the financial sector over the last twenty years.

Does any of those “going Galt” understand that that’s $250,000 in taxable income (not including capital gains)? Doesn’t seem so.

actually, it’s $250,000 AGI in the discussion, not taxable income. This does include all cap gains except those from sale of a primary residence.

“Firstly, I’d probably be inclined to say that utilitarianism is actually meaningless, because there is no such thing as ‘utility’ that can be compared between people. It’s not just that determining the various levels of utility of different people causes epistemic difficulty, it’s that there is no underlying phenomenon there to be measured in the first place”

The underlying phenomenon is that people want things (“things” in the broad sense including lifestyles, abstract liberties, etc.). “Utility” is just a label for the subjective satisfaction that comes from getting what you want. That utility assignments for a given person are sortable (i.e., there’s a DMU) is an implication of the fact that people make choices. Choices are not always easy or consistent, so the sortability is not necessarily perfect, but if you toss this out, you pretty much toss out all of economics, including the bits that are just common sense and that we see operating all the time. As for comparing utility functions of different people, you can’t get normative results without normative premises, and I am assuming political equality as a value. Under political equality, everyone’s subjective concerns – their utility function – as a whole should be equal as a people concern. So each utility function generally descends and each sums to one. There is some variation in slope possible, but public policy will always require some approximations. Certainly, assuming some variation is slope for particular people over others, e.g., such that their strong desires get more but their weak desires less favor, would require some additional work to establish, i.e., it cannot be baseline.

As for your second paragraph, if you have an argument to make, make it. Anybody can point to the library, but unless you’re going to pay me, you don’t get to assign me work. Although I didn’t say an equal distribution was justified, I said it was baseline, i.e., that one would have to justify deviations from it.

I’ve no idea what you’re talking about. Certainly I’ve got a problem with some people having stuff and others not as a result of luck. I can also tell the difference between “individual beneficiary of luck” and “individual beneficiary of collective policy”.

“In the current world there will be people who will move from one tax area to another. I am proud to be an American. But if tax became too high, as a matter of principle I would not be working this hard”

That’s true assuming that the demand for their services is fairly inelastic. So, under this logic, the tax increase ultimately falls on those with the least elastic demand for the services of the highly compensated.

Since taxes have generally been falling over the same period that compensation differentials have been going up, it makes one wonder how much higher the differential will go with a tax increase on the highly compensated.