I believe the top tax rate should be 75%, but with a caveat: the top tier of taxation starts at exactly 10% above whatever my salary is for that year. That way rich people have the right incentive: to make sure I make as much money as possible in order to reduce their own tax rate.
See? A joke! A small and insignificant one, but a joke nonetheless!
There is a small kernel behind this, actually: that the tax rate should get exponentially higher the further away someone’s income is from the median income of people whose jobs they are responsible for. That way their incentive is not only to maximize their own income by itself, it’s to also increase the median wage for their employees in order to reduce their own tax rate. And the higher tax rates start increasing exactly at the median employee income.
Once you get past some multiplier X of the median salary of people your company employs, your tax rate should shoot up pretty quickly. I don’t know what the value of X is in order to be fair, but I do know that 300 is way too high, and that’s the difference today nationally between CEOs and the average employee (I couldn’t find any reasonable stats on median).
Of course it’s impractical: there are too many complications to think of and address in a WordPress post. You would probably have to have a minimum number of employees for the median to start making statistical sense, and investors who earn income from indirectly funding work and not hiring employees directly would need a different tax method. But our tax system today is structured in a weird way to provide incentive for personal gain at the expense of community economic health, and we need more ways to make it more palatable than punitive to help improve everyone’s lives. It’s also structured today to make the proponents of “trickle down” economics demand their benefits up front, and expect everyone else to take on faith that they will eventually get some unknown benefit at some point in the future (no guarantees): we need to make sure that these promised benefits are real enough that those who promise them are willing to link their benefits to them as well.
Also, any CEO or board member of a bank that received TARP funds because they were “too big to fail” and then proceeded to buy up smaller banks and sit on the cash instead of making credit available gets taxed at 99% on any income over the lowest income of the owner of any mortgage they’ve foreclosed on. In perpetuity.