1) It is a disincentive to others who might try to reach that level

2) It's hardly clear that the success of the wealthy is due to how society is structured, and not their own effort. Undoubtably some is, but is it 90/10 or 10/90?

3) It encourages relocation of talent, business, and capital to states or countries where the tax situation is more favorable.

4) It's not clear to me that more tax revenue results in a net benefit to society. My opinion is that the rich are better at investing their money for optimum yield than the government, and the end result is more benefit for society.

1.) Right, I'm going to give up on my dream to get rich because I'm paying a 4% higher marginal tax rate. Nevermind that I can afford an accountant to figure out how to minimize my tax burden and will effectively end up paying a smaller percentage of my wealth.

2.) 'Wealth', as a concept, does not exist except within the structure of the society that recognizes it. Ours happens to be structured so that to some degree you can earn your wealth. It's a Randian fairytale that anyone is wealthy from solely their own effort, though.

3.) That's true. But the U.S. actually has a pretty average tax rate compared to a lot of other places, is more or less stable, and has the largest paying market in the world by far. It's not the only consideration.

4.) That's also true (or at least debatable - a lot of wealthy people invest super conservatively so as to maintain their current wealth, oftentimes right back into the government itself, and are hardly engines of innovation), but you were asking for a basic moral justification, not a full exposition on the effectiveness of the current tax code and budget.

Of course, after retaining this right the gov't expanded it for all manner of other purposes.

You also have to remember that in most non-US countries rights flow from the crown/gov't to the people, not from the people to the gov't, so the legal justification would be much different and along the lines of "because we didn't cede that to the people"

This applies equally to the engineer who makes $225,000 and who might be willing to put in extra effort but won't if the reward isn't worth it.

So the issue is shifting the cost/benefit equation over to where there isn't enough benefit for people to put in the effort

There is no way, in the American progressive tax system, to get a raise, be moved into a higher tax bracket, and end up taking home less money. It's just not possible.

@ryanwaggoner - correct, ty.

A state flat tax will tax this new raise at the same flat rate as all the existing pay.

The marginal federal tax will tax the new raise, in your scenario, at the new, higher tax bracket.

But your scenario would have the gov't taxing this new cash into the red, reducing her take home pay. That's not gonna happen. Period.

Aside from the larger question of why the government has the right to take people's income by force to begin with

Because the government provides services that you cannot "opt-out" of. You benefit from services (ie, defense), no matter how much you try not to, by merely living within the borders. This is our "social contract". The free-rider problem makes this an essentially necessary part of any modern society.

It is a disincentive to others who might try to reach that level

And your argument ignores the incentives to reach that level (ie, being rich). They are two forces that MUST be balanced. Ignoring the incentives, I can see how you'd view all taxes as ONLY disincentive. This ignores the reality of the situation, however.

It's hardly clear that the success of the wealthy is due to how society is structured, and not their own effort. Undoubtably some is, but is it 90/10 or 10/90?

It's actually quite clear on issues that take very much for granted. Like binding contract law, law and order, due process, and so on. Even still, no matter what the split, the rich -do- benefit from these more than the poor. This is a rather poor argument, though, because even if the rich didn't benefit more than the poor, the progressive tax system is moral for other reasons (decreasing marginal utility of a dollar, most importantly).

It encourages relocation of talent, business, and capital to states or countries where the tax situation is more favorable.

Yes, an economic factor that MUST be considered. Again, pretending that all tax raises are bad for a reason like this implies that the optimal tax rate is 0%.

It's not clear to me that more tax revenue results in a net benefit to society. My opinion is that the rich are better at investing their money for optimum yield than the government, and the end result is more benefit for society.

Is -any- tax revenue a net benefit to society? Or is the optimum zero? If you believe that the optimum is above zero, then you MUST acknowledge that taxes can be too low, and must raised.

Any (libertarian) argument that tends to natural conclusion in an optimal tax rate of zero can be discarded as poorly thought-out. On the flip-side, any (socialist) argument that tends to the natural conclusion of an optimal tax rate of 100% can be equally discarded.

Please provide some resources, as I'd love to expand my knowledge in this area. I'm serious.

Perhaps I worded a few things incorrectly here. I think a flat tax is a much more workable solution, perhaps with credits at for the lowest income levels.

This is a rather poor argument, though, because even if the rich didn't benefit more than the poor, the progressive tax system is moral for other reasons (decreasing marginal utility of a dollar, most importantly).

Can you explain more about this?

I can live anywhere in the world I want to -- and with all kinds of luxuries.

Seems to me like the "people who benefit most from how society is structured" would be those poor folks who through no fault of their own, perhaps mental retardation, chronic illness, or birth defect, cannot make a living and yet are provided for by the rest of us. These are the people who would die under a differently structured system, right?

After all, rich folks got it good under all kinds of systems.

Your point was we should take money from those who got the greatest benefit from our society. By that reasoning, people who are alive now and would have died otherwise have it the best, right? Or does that extra boat or summer house so important that it's a better benefit than living?

Listen very closely: whatever system you set up, there will be rich people. If you tighten the tax laws, the rich will be criminals and politically-connected people. But there will always be rich people. It's true in any societal construct. They will always have a better lifestyle than the average person. Given the criteria you have presented, you will never end your quest to find rich people and tax them.

Edit: just having the money in the bank is not benefiting. Using service, health care, infrastructure, education, free time, etc. That is benefiting.

Edit2: Furthermore, they are ALREADY paying the most.

In the aggregate, I think one can make the case that the wealthy contribute more to society than the poor, in the form of jobs, capital, etc. How do you determine value to a society other than through what the society is willing to pay? And if those other jobs were worth more to society, presumably we'd pay people more to do them.

What's intellectually dishonest is pretending that money is the only way to measure value.