If you question the wealth of the rich, folks will often say that they got there through “hard work.”
Probably true, but they are also lucky — lucky to be 6’8″ tall and athletic, lucky to interested in software programming instead of buggy whips, blessed with smart caring parents instead of abusive slobs, etc. Or maybe they guessed right in the casino of the stock market. Or maybe they have a high IQ, but one cannot improve their given IQ. Mainly it is being in the right place at the right time—luckily with the right stuff.
Let’s check out the possible remuneration for simple “hard work.” The federal minimum wage is $7.25 per hour. Let’s say minimum wage workers don’t work very hard (which of course we know is untrue, but for the sake of the argument). Let’s say our rich person works a hundred times as hard (not possible, but for the argument). So, they should make $725 per hour.
The minimum wage worker is working 40 hours per week (but may need more than one job to survive, but again bear with me). However, the rich person works really hard, twice as long, 80 hours per week.
80 hours x $725 per hour = $58,000 per week for that extra hard, extra long work.
52 weeks x $58,000 = $3,016,000.
So, if one makes more than $3,016,000 per year it is not through hard work alone— it must be through luck.
Any income above that point should be subject to a special “Lucky Tax” because it wasn’t gained through work, but through luck.
Note that I am not begrudging luck, just saying that if we value work more (the American work ethic) we should tax it less — and tax luck more.
*Another thought: What if we indexed tax brackets to the Federal Minimum Wage? Start with basic minimum wage paying $0 in tax.