Fin Keegan

John C. Goodman and Laurence Kotlikoff have put together a modified version of Steve Forbes’ famous flat tax plan.

What I like about their plan (linked below) is the implicit distinction between “rich” and “poor” dollars, i.e. the acknowledgment that one’s ten-thousandth dollar has a different meaning, and hence value, from one’s ten-millionth dollar.

However, I think we should go further: continued progressivity to tax saturation. In other words: a universal salary cap.

Why? Because there is nothing, beyond single-handedly curing premature death, that any human being can do that merits earning on the current level of our billionaire class.

We’ve become so used to the endless pursuit of personal wealth that nobody thinks it odd anymore but, as any Martian will tell you, no mortal, American or otherwise, has any true need (or actual want, indeed) of their twenty-seventh million dollar wad.

Therefore I propose that the tax rate kicks in at the level suggested by Kotlikoff and Goodman ($46,000 for families) and thencefrom progresses at an evenly growing tax rate until, at $4.6 million, say, the rate terminates, necessarily, at 100%.

Granted, there will be a challenge to society (for one, how to re-allocate the money without bloating government) and the makers of fine shower curtains and umbrella stands might notice a dip in sales–but we would, on the up-side of my plan, be spared the obscene and ultimately damaging kink of our current system: wealth obesity.

Reference: John C. Goodman: A Kinder, Gentler Flat Tax Forbes, September 29th, 2005