Putting a limit on how much an individual can earn would be a terrible decision if analyzed properly and it just can't work no matter how the government tries to impose it on the citizens. Although it seems like a perfect way to tackle the income inequality many people complain about in the world today but that's definitely not a solution.
I tried painting a picture of such a situation, and it would all begin with people disposing of their money because they have more than they should. Will the money be taken by the government or the masses? Honestly, it's just unreasonable for any government in the world to think of creating an equal society when it comes to finance. The world is designed to be a place where there will be some inequalities that can't be corrected, and trying to create a balance would on attract negative consequences.
The truth remains that there will always be the rich, average, and poor in society, and we can't change that.
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When it comes to work, people have different levels of commitment with their resources, which automatically means they have higher chances of making more money than others due to what they have invested, which is quite normal because you can't expect someone who pushes himself/herself to work a double shift in a company to earn the same amount as someone who does just one shift.
Restricting this set of people who invest more to a fixed earning would be a pure cheat on them, and it would even make them lose the motivation to always put in their best to work. I can confidently say that the negative effect of putting a cap on how much people can earn outweighs whatever positivity it's bringing to the table.
Let's look at things from an entrepreneur angle. These people put a lot of effort into pushing their brands to the public; they take so many risks just to succeed, and they will never be happy with having their earnings restricted to a certain amount.
The question would be, why should they put in their best when the effort and resources invested don't determine their earnings? Any sane human would definitely keep their ideas and resources when the reward is not worth their investment.
Without arguments, you will agree with me that many lucrative business ideas and innovations would never be developed, and attaining growth will be quite challenging for not just individuals but the country as a whole. While a lot of creative and hardworking minds will experience stagnancy, it would as well be a huge blow on the country's economy because investors will definitely want to take their money elsewhere, except it's a global thing.
A massive withdrawal of investors poses a great danger to the economy as growth and productivity will become extremely difficult.
The same thing should be expected from workers in different organizations or companies; their productivity will drop drastically since there is nothing to be ambitious about
Workers putting in extra efforts and dedication to work will eventually amount to nothing, so there is no point in doing more than I should. There won't be challenges or healthy competitions among workers, and it's one of the easiest ways to kill an organization.
As much as I think about the possibility of this happening, I doubt if it will ever be a thing because even the politicians will be affected, and that alone will never let such a law exist in any part of the world.
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Today, the inequality in earning is a drive and motivation for many people because they have several shots at improving their lives when they put in their best to work. That's why growth is attainable for many entrepreneurs, individuals, and even the nation as a whole; skills and talents are put to use, ideas and innovations are being driven, investors are ready to pump money while entrepreneurs are ready to take risks all because they are sure of getting something that's worth their investment, but when this drive is taken away, things will take a different turn.
From my points, you can clearly tell that I am not in support of capping earnings for whatever the reason may be since it would ultimately cause more harm than good to me as an individual and to the nation as well. Instead of capping earnings, it's best for the government to provide opportunities and avenues for the people to step up financially. That way, we can create more rich citizens rather than forcing everyone to be on the same level.
Thanks for reading, feel free to share you thought about what the effect would be if the government decide to restrict everyone to a certain earning.