Riddle me this

[jaguar]

I'll grant all your points about social mobility, and take my lumps on using unverified numbers. But we're still left with very basic questions that you still haven't answered. I'll reword them: Why should the federal government increase the percentage of income it takes from you to offset the costs incurred by its inability to wisely use the money it has already soaked you for? Why does "society," with all the grand implications of that term, owe anyone a living? What is the incentive for someone who manages a small business on family income to succeed in that business when they know at some point, they will be punished monetarily for it and that which they have honestly earned will be stolen and Robin-Hooded out to those who did not earn it? Furthermore, if they know this is to happen, what's the point of charitable giving on a personal level?

Ok, let's break this down because you're lumping stuff together.
The key point, other stuff stripped is why does tax increase as income does. As far as I can see, society as a whole has deemed that those with more can afford to contribute more to the collective kitty we all benefit from in the forms of police, roads and floral clocks. Simple as that. Arguably the turrany of the majority in action but that's another point entirely.

Moving on to the other bits and pieces. I don't see the relevancy of efficiency of government spending, see above. As for owing a living, outside those who cannot work or have earnt their pensions, arguably society doesn't. Once again, clearly the majority feel that the severely disabled and the old deserve that, if not, I'm sure the 'boot the cripples onto the street' party would sweep in at the next election. Beyond that, that money doesn't just go into the pockets of the poor, it goes into the roads you drive your merc on, the airport you land the private jet on was probably built with government money and the marina for the yacht probably was as well.

I really don't get you on this small business stuff. Seriously. As I've said enough, I've never heard of someone not starting a business because their tax bracket might change. You don't seem to have a perfect grip of the tax system yourself and if your friend is totally uneducated at finance he should get himself a CPA, it's common bloody sense, would you go into a courtroom without a lawyer if you knew nothing without law? I don't see how moving up a tax bracket would cause him to have a lower income, the only kind of situations where that kind of thing could occur is if his business was so tiny as to fall outside the bottom bracket for things like having to apply sales tax. In which case he can't possibly have been living off it to start with. Should the tax code be more understandable? Same applies to law. The answer is that anything that has to deal with so many situations and complex financial arrangements is never going to be that simple, it's just not possible. There is also a governmental role here, good documentation and advice are important and good tax departments provide them.

From a purely economic standpoint your friend's business clearly wasn't competitive, that's what the market does, weeds out uncompetitive businesses. If you want to get all libertarian on my ass you better accept that. Pride? No-one's making you take out unemployment benefit or the small business loan, hardass. Class war? I'm calling them as I see them. Wanna talk about big money connections? Since '94 when DeLay and other misc. scum swept in they stuck a pretty sweet deal where the money goes to republican lobbyists and in exchange industry gets to write legislation, look at stuff like the failed energy bill for a particularly extreme example. There's wealth at the top of both political pyramids but this particular republican one seems notably scummier than most.