The idea of a one-time tax ‘levied’ by the government?
Sort of like those “one time” accounting adjustments the government now allows, and that seem to happen every fiscal year.
Sam is short sighted in that he doesn’t realize that accepting such a thing sets a precedent. It also sets up incentives. That’s how Greenspan got into the mess of repeated bailouts, the Greenspan Put. If you bail out the losers that sets a precedent which incentivizes irresponsible risk taking. Heads I win, tails the taxpayer loses.
Part of the reason why unemployment is staying high is that it is quite obvious that someone is going to have to pay for all the bailouts and stimulus programs. A “one time” screw-over, until it happens again. Why risk your capital on marginal projects if you expect to be taxed to death?
This doesn’t seem to make much sense - the clearest way to avoid being taxed to death is exactly to invest it.
The threat of moral hazard is obviously real - the question is, who do you consider as being insulated from risk in this case? Who stood in which position to be informed and who acted of their own accord?
Trickle-down has failed completely - market players have generally shown themselves to be completely irrational in their short-sighted approach to self-optimization. The US socio-economic data points to not only very poor upwards mobility, but also a widening gap between the extremes. Truth be told the current system seems to have been an abject failure at anything except producing a sizable population that is incapable of realizing it. Between the inability to foster a society with good educational outcomes, a seeming celebration of taking advantage of each other and the instillation of psychological deficiencies on a scale that can only be described as horrifying - I would say that the moral hazard would lie with letting things go on as they are.