I would argue a flat tax is the way to maintain prosperity to the middle class. Aggressively taxing everyone and redistributing only goes to benefit the lower middle class. Which then becomes the new poor and drags mid to upper middle class down.
Let's see, as arm chair economists, can we have an interesting discussion?
It could surely be a tax focused on ultra-rich, who have benefited from tax cuts by parties in power for years. Corporate and ultra-rich taxes are not insane concepts, what is the real difference in quality of life of $20M vs. $50M? What necessities of life are not met? Corporate taxes are even better, dodge those, issue large stock buy backs which will benefit largest shareholders the most -- Milton Friedman smiles from the shareholder value heavens.
Imagine the economy has a huge MCMC graph, potentially everyone is connected to each other, with edges of varying strength that correspond to possible outflows and inflows of money between people (and perhaps entities/institutions). It becomes clear that some nodes in the graph are connected to other nodes that end up keeping money in few places to "invest" and accumulate wealth, sitting there, doing nothing for anyone else, tremendous capital accruing more capital because that is how this game can work. Other nodes lead to money moving rapidly in the network and having affect on the lives of many nodes. The economy has to be movement of money among individual components of the economy, because money is the meta-resource, so just use that to stand-in for anything.
> what is the real difference in quality of life of $20M vs. $50M?
Minimal.
But people having so much money that they have nothing to spend it on encourages investment in wild ideas like SpaceX or OpenAI. If you tax that money away, who will invest in new ideas?
Both manufacturing corporations and mutual investment funds are ways to aggregate smaller amounts of capital into big enough sums that large factories or investments are possible. I don't think it's necessary to rely on multi-billionaires for investment in wild ideas.
That’s of course very easy to remedy by only requiring taxes to be paid by those making over a certain income, say 80k and somehow tied to inflation so the amount raises slightly over time.
