The earnings disparity is at the individual levels. People, ultimately, invest. People, ultimately, expect to profit. Investment profits are paid to these individuals with high income. Hedge funds profiting from derivatives trading which ultimately results in higher share movement which ultimately leads to increased investment in securities. <br> <br>In other words, your "L" about hedge fund managers and CEO's is not based on corporate wages. Its based on what these people take home in CEO/performance compensation and its part of what makes the world go round in terms of American economics. <br> <br>Here's an example in terms of corporate earnings. A corporation invests in a subsidiary with the expectation of a profit. Their investment then does two things - it provides capital necessary for growth and advises the subsidiary on how it should operate to maximize its managerial effectiveness. They do this in exchange for earnings growth which in turn is profit. Taxes create a dissincentive to do that, or rather they re-adjust what constitutes a lucrative investment. That's not a process you should be messing with, it works well now and helps everyone. <br> <br>In terms of personal investors, the largest income earners are people who are benefitting from private capital investment. Derivatives trading (hedge funds) and also venture capital. Ultimately derivatives trading increases stock movements which allows companies to better fund their operations through common stock offerings. Venture capital and private equity investments are high interest lines of credit extended to start ups and growth companies to fund their growth where banks won't take the risks. Both are important parts of our economy and part of what enables entrepreneurial success in the United States. <br> <br>In other words, its very stupid to think you can just tax the hell out of the people who ultimately play a large role in our economy without any adverse affects. <br> <br>Especially to some large extent because in the global market we live in today there is an interdependency required thanks to trade deficits and largely due to a combination of the realities of modern 1st world living as well as the after-effects of social policies which have impacted the economies of 1st world nations. In short - you need to be able to import goods because your country is unable to furnish them internally - therefore you are reliant on China and others to create your goods. China in turn is reliant on the American dollar to fund its growth. We're all economically connected. In essence, when we benefit so do you and vice versa. <br> <br>The last thing Europe as a whole needs is a protectionist, socialist United States and given our trade deficit if we were to impose socialism here on a larger scale than is already present and further increase our tax burden while attempting to maintain our current inflation rates its very possible in the not-too-distant-future we may be forced into protectionist policies in order to sustain our economy.