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Both of you make some excellent points and I'm learning stuff from each of you. Something I would also point out is that the disparity in annual income among different professions, such as ibanking, management consulting, accounting, teaching, etc, does not wholly reflect productivity. For example, your average second year ibanker makes 60k + say another 60k in good times for the industry. That's 120k based on 120 hours per week. A McKinsey consultant maybe making say 100k annually, but he's working 100 hours a week. Your high school teacher may be making 40k, but he's working on average, 40 hours a week. Productivity is a rate. And if wages reflect productivity, then there is not a whole lot of difference.
But by the same token, the system is essentially taxing the people that work longer hours, which is an input. It doesn't really make a lot of sense to tax people more because they want to work longer. That and what NYB said about wealth v. income is why this tax system needs to reform.
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