There is no tax rate system that will ever tax any income at more than 100%. If you earn an extra dollar, you may only ever take home $0.01 (because you owe $0.99 in taxes). You might even take home nothing in some hypothetical 100% marginal rate tax regime, but nobody has ever proposed a system where you owe more than $1 on any $1 of income.

> The real consequence of believing in the argument directly implies that nobody should earn more than X, for some amount of income X (like 50k) where after that the marginal utility is so low that it might as well can be given to the state to waste.

Yep, that's precisely the belief and it's well grounded in lots of research into happiness, utility and so forth. Now, as it turns out, nobody has the courage/conviction to actually impose a 100% tax rate for any income over $X, so the reality is that the tax systems at play in the real world do not in fact prevent anyone from earning more than $X. Given that even the highest rates ever imposed in western industrial democracies were far from that, this just seems like a strawman. Even at 90% (the highest US marginal tax rate), for every $1000 you nominally earn over the $X value, you take home $100, thus earning more than $X.

BTW, $X is much, much higher than $50k, but I suspect that this is just a typo on your part.