The non-bogus conservative argument against Obamanomics, part II

The difference is a higher tax rate continues to work as income goes up whereas a simple lopping off of benefits (and curtailing deductability options) has a limited effect. We already do elements of this - limiting child tax deductions and other exemptions as income crosses certain high thresholds. But where is the marginal effect of that once the threshold is crossed? If there's none, how does that address the incentives contributing to inequality growth?

I think the idea is that you don't want to rein in the incentives contributing to inequality growth, because they're also contributing to economic growth. But you want to at least do what you can to make sure government policy isn't exacerbating the inequality growth.

I'm having a little trouble with that argument, Justin.

In the US, the economy is driving by consumer spending. If you were plot spending by income, you would tend to find that the percentage of income put back into the economy falls as income rises (i.e., the poorer you are the more likely you are to spend money on goods and services). That would mean that taking an extra million from that billionaire won't affect the economy all the much because that million tends to not go into goods and services anyway.

Moreover, it seems like market forces stop working on income after a certain point. Even CEOs who fail at leadership receive handsome paycheck. Capital gains also receive a lower tax rate than income and much of the wealthy obtain income via investments rather than actual work.

Those are okay ideas, Justin, but c'mon: you're picking up dimes in front of a steamroller.