> Economic utility and purchasing power of $1000 is the same whether someone earns $10K or $10MM per month.
Marginal utility of the $1k is not independent of income, even if purchasing power (almost irrelevant in this context) is. This is just basic economics.
> more people would incline towards doing startups, etc.
This seems naive. The rich do not, in general, do startups. The super-rich in particular do not do startups. Maybe you mean "invest in startups", which is an entirely different thing, since it presupposes the existence of startups to invest in. There is zero evidence from anywhere in the world that reducing taxation on the super rich results in any notable increase in investment activity.
I have no idea what this "rebalancing" that you're referring to is. I see no evidence that economies in the real world are in equilibrium states, nor any reason to suppose that they would be.
> For somplicity sake, if all are made to pay $30,000 per year in income taxes, those who earn less would stop working,
This thought experiment seems fairly pointless. This isn't going to happen. And if it did happen, people would not stop working. People need to eat, etc. Depending on the enforcement of the tax, they would have to find more or less ingenious evasion methods.
Marginal utility of the $1k is not independent of income, even if purchasing power (almost irrelevant in this context) is. This is just basic economics.
> more people would incline towards doing startups, etc.
This seems naive. The rich do not, in general, do startups. The super-rich in particular do not do startups. Maybe you mean "invest in startups", which is an entirely different thing, since it presupposes the existence of startups to invest in. There is zero evidence from anywhere in the world that reducing taxation on the super rich results in any notable increase in investment activity.
I have no idea what this "rebalancing" that you're referring to is. I see no evidence that economies in the real world are in equilibrium states, nor any reason to suppose that they would be.
> For somplicity sake, if all are made to pay $30,000 per year in income taxes, those who earn less would stop working,
This thought experiment seems fairly pointless. This isn't going to happen. And if it did happen, people would not stop working. People need to eat, etc. Depending on the enforcement of the tax, they would have to find more or less ingenious evasion methods.