good point. I would also add that there have been a spate of multimillionaires all over the country running for office (usually with self-financing campaigns) -- and lots of multimillionaires willing/eager to take upper level positions in government....and their pay is a pittance compared to private sector compensation.

Nor do I hear a lot of the people who celebrate the huge amounts of money being made on Wall Street demanding much higher wages for public officials because we'll get better qualified people if we institute those raises...

oh, It looks like I forgot to mention my 90% tax on assets switched to offshore accounts?

that being said, of course the 63% tax rate thing was a joke -- a reference to Justin's obsession (which I like) with Denmark. Nevertheless, I do think all these tax cuts for the upper income brackets have had seriously negative consequences for the economy, because while such cuts may have a marginal positive impact on productivity, they have a massive impact on encouraging greed by switching the focus for corporate profits from reinvestment/better wages to executive compensation and short-term capital gains distribution.

(i.e. lower taxes on high incomes wind up being counter-productive to the long term economic health of companies. Instead of long-term reinvestment strategies designed to increase the overall real value of a corporation's assets, its turned into a get rich quick scheme. And while stock prices go up, its not because the companies are really worth more, its because the growth in capital available for investment lags way behind the creation of good places to put the money that the rich are getting -- and anytime that the demand for an item exceeds the supply, the price of that item inevitably rises not because its intrisically worth more, but merely because its in short supply.)

P. Lukasiak -- Woof. Believe it or not, I'm a proponent of progressive taxation, too, but punitive taxation is right out. Slap a 63% tax on anyone and just watch how fast we all move to the Maldives. I don't like New York City that much. Just watch what happens to the tax base when 5% of the population and 50% of the wealth moves offshore: ouch.

well, it would have to be in a vacuum, because only in a vacuum would things like irrevocable trusts whose principal can't be touched not exist.

Crust is right. Its not a wealth tax. Bill and Milinda, and their kids, and their kids, and their kids, and THEIR kids, could live off the wealth accumulated by Gates and not even come close to touching the principle.

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But back to the subject of the thread... what I'd do to deal with the Wall Street pay dilemma is impose a tax of 63% over all income over $70K, thereby discouraging extravagant compensation packages for both alphas and betas -- alphas, being alphas, can't help but continue to work, and one beta is as good as another, and there is no shortage of them!

Sorry, I never got past the first two letters of the Greek alphabet.

Touche. I used too much jargon. My basic point is it's important to understand the asymmetry of returns involved in selling options and how it naturally leads to such situations.