Should there be a maximum wage?

[parochial boy]

The worst aspects of inequality are a result of the distribution of wealth, more so than unequal salaries. So, possibly a more appropriate way to address it would be through mechanisms like a Capital Gains, inheritance or a land value tax; or by capping the use of stock options as a form of remuneration (especially as that encourages short-termist profit maximisation by senior executives who will only stay in place for 3-4 years)

[parochial boy]

I don't like when companies funnel all their profits to the CEO

That's not really the problem at hand, as I alluded to earlier, one of the biggest problems is CEOs being paid in shares or stock options - as handing out wealth like this drives inequality more than salary differences do.

A major part of why CEOs get paid in shares is precisely because the old accounting standard (I think it has been subsequently changed under IFRS, but would need to double check), meant that issuing shares to executives wasn't counted as a cost and was therefore an easy way for executives to hand themselves massive pay rises without actually affecting their bottom lines.

Of course, this gives executives a pretty good reason to make all sorts of decisions to maximise short term profit at the expense of the health of the company in the long term (cut R&D programmes and the like), because they will leave and sell their shares in three years.

So whichever way you look at it, cracking down on excessive pay is a necessity, both from the argument that it drives inequality and on the argument that it is economically unhealthy.

[parochial boy]

In the form of a marginal income tax bracket at or close to 100%, absolutely.

If wealth isn't incentivised, the entire economic system breaks down. It's a rediculous idea.

lol sure

     That's not really a constructive response to the criticism proffered, which is an important one.

It's really not, since it's based on a ridiculous and morally appalling premise. The sort of person who would only contribute to society if they get a 7-figure salary (to the extent that person even exists) is exactly the sort of person society can do without.

     At its heart lies a postulate with the potential for empirical testing. That postulate is that people work for money, and that people will not work as hard if their earning potential is capped. A special case of this has been demonstrated to apply in communist states, but the more general case is to my knowledge unproven.

     If it is the case that capping earnings even at a fairly high amount significantly hampers economic growth then I am afraid that your position is the morally untenable one, as you would be sacrificing the wealth and prosperity of a nation and its people for the mere purpose of avoiding the existence of a few wealthy people.

At the same time, there is an increasing line of argument that spiralling levels income for the wealthiest, and resultant inequality have weakened overall economic performance; in which case uncapped (or at least unrestricted) levels of income are also damaging to economic growth and therefore overall prosperity.