# How would a tax rate of 100% work?

**URL:** <https://boards.straightdope.com/t/how-would-a-tax-rate-of-100-work/851675>\
**Category:** Factual Questions\
**Created:** [April 13, 2020, 3:26am UTC](https://boards.straightdope.com/t/how-would-a-tax-rate-of-100-work/851675 "2020-04-13T03:26:40Z")\
**Posts on this page:** 4\
**Page:** 4

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**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\
**Post date:** [April 20, 2020, 5:50pm UTC](https://boards.straightdope.com/t/how-would-a-tax-rate-of-100-work/851675/61 "2020-04-20T17:50:45Z")

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[Moderating]

A reminder: This GQ thread is about the mechanics by which a 100% tax rate could be implemented. It is not about the wisdom of such a tax rate, or its likely effects. Those would both be topics for GD (though I doubt that either would be much debated).

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**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\
**Post date:** [April 21, 2020, 4:12pm UTC](https://boards.straightdope.com/t/how-would-a-tax-rate-of-100-work/851675/62 "2020-04-21T16:12:08Z")

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> [@Chronos](#):
>
> [Moderating]
> 
> A reminder: This GQ thread is about the mechanics by which a 100% tax rate could be implemented. It is not about the wisdom of such a tax rate, or its likely effects. Those would both be topics for GD (though I doubt that either would be much debated).

Several of us have explained the mechanics of how a 100% tax rate would work. There doesn’t seem to be much more to be said on that topic. So why not let us have a discussion on the effects and wisdom?

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<div class="post-metadata">

**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\
**Post date:** [April 21, 2020, 5:28pm UTC](https://boards.straightdope.com/t/how-would-a-tax-rate-of-100-work/851675/63 "2020-04-21T17:28:47Z")

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You can have such a discussion. Just have it in the appropriate forum.

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**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\
**Post date:** [April 21, 2020, 7:32pm UTC](https://boards.straightdope.com/t/how-would-a-tax-rate-of-100-work/851675/64 "2020-04-21T19:32:17Z")

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The surgeon may stop at $1M net income. I’m assuming tax on net, because 100% tax on gross is even stupider than 100% tax. He’ll take partners, or the overflow will go to others. His take-home would stay the same.

Like the corporate jet example, he may feel generous and simply pay his staff more, gussy up the office, put a big screen in the waiting room, etc.

There wouldn’t be a shortage of money - the key point with money is “velocity” - how fast do you spend what you earn so it becomes income for someone else? Besides, how much of someone’s extra over $1M goes into general circulation, compared to what the general population earns?

not mentioned in all this is the progressive tax element. Presumably if there’s 100% at $1M there’s high tax brackets all the way - so say, the last 1/4M is taxed at 75%, $500,000 to $750,000 at 60%, etc. the disincentive to earn more will be felt long before hitting the 100% wall. If, say, you only get to keep 10% of your last $100,000 why even bother? This is where as I suggested earlier creative business expenses become a factor. can you really forbid business conferences from being held in Tahiti or Bali?

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