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Too little tax and a bunch of new cash? Investing becomes a gambling game, played for the thrill of winning. That means these guys aim for big returns, double digit, and big digits at that. This aim forces them to take risks, and they lose a lot. They don't like that, they want to be a winner, so like all losing gamblers they make bigger, riskier bets.
This is the new rich with a few million, of course. The really rich don't play this game, except to be the 'house' for the gamblers....
A high final tax bracket, say 80%, would take away a lot of the incentive for this dysfunctional, wasteful development.
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