The New York Times's Economic Scene columnist, David Leonhardt, writes, "Right now, the 400,000th dollar earned by a surgeon is taxed at the same 35 percent marginal rate as the four millionth dollar earned by a hedge-fund manager. This makes little sense, and it runs counter to how the tax code worked for much of the 20th century."
The inclusion of the earners' occupations seems to suggest that Mr. Leonhardt thinks the government should tax different job-related income differently based on the occupation of the wage earner. Some questions that might help illuminate why that is a slippery slope: What if the surgeon is a Park Avenue plastic surgeon who makes all his money performing elective cosmetic procedures on the wives of hedge fund managers? What if the surgeon is a fifth generation Harvard graduate whose ancestors came over on the Mayflower and has $1 million a year in triple-tax-free municipal bond income, while the hedge fund manager is the first in his family to go to college? What if the surgeon is the wife of a hedge fund manager who, if her income were taxed at their new higher Leonhardt-proposed joint marginal rate, would quit performing surgery and instead stay home with the children? What if the surgeon is essentially a government contractor who earns 95% of his revenue from Medicare and Medicaid, while the hedge fund manager earns his money in the private sector? What if the surgeon can count on his $400,000 a year pretty dependably for a 30 year career, while the hedge fund manager has a 25% chance of his fund closing and his being out of work for a year or more each decade?
Nothing against surgeons, but what makes "little sense" to me is the notion of the government adjusting tax rates based on some government- or journalist-approved idea of the social utility of the occupation in which the earner is engaged.