This is a fundamental tenet of the market, which we might call the "free market" to emphasize that people should be allowed to participate without coersion or external meddling. The farmer produces wheat and I produce shoes. The farmer has no use for additional wheat, and I have all the shoes I will ever need. By exchanging, we both gain. Such trade is the basis for all market activity -- choosing to give up a dollar to gain a McDouble, choosing to give up leisure to gain a wage, choosing to give up revenue to gain more employee labor. If either party in such exchanges feels they are not gaining by the trade, they can decline to participate.In a market system, to some extent, for everything one individual accrues, others have given.
"To some extent" is a hedge, but I submit that this claim is backwards. I assert that In a market system, for everything one individual gains, others have gained.I don't see why it [a 100% marginal tax rate] makes no sense.
People making lots of money can choose to give their additional income to others. Many already do. The obvious consequence of taxing all income beyond a certain level is that there will be little incentive to earn income beyond that level. No sensible wealthy people consider donations to the Treasury a realistic act of charity or investment. A 100% marginal tax rate will therefore suppress economic activity, which may not harm the magnate much but will definitely affect those less wealthy on the other end of the transactions. It will also encourage less-efficient use of resources, such as tax evasion and sheltering.If you are earning $500M per year, maybe more money isn't the healthiest motivator.
Why worry about the health of this capitalist? He will be fine. But do consider the much more widely distributed benefits on the other side of all that economic activity -- employees putting food on the table, investors aiming to improve their future, yacht washers, etc.