Proponents of the policy argue that it enforces the ideals of a maximum wage without restricting actual capital growth or economic incentive.
When this policy is imposed, individual savings can only be held as solid assets like stocks, bonds, business, and property.
Proponents of the maximum liquid wealth policy respond that government could be directly responsible for supplying loans to individuals; they also add that such an arrangement could result in vastly lower interest rates.
However, the hiring of external employees will come at a higher total cost and will reduce company profits, something against which executives are often measured and compensated.
To moderate self-employed individuals, the maximum could be based on the average compensation of the nation's employed (GDP per capita) and a specific multiplier.
As the number of self-employed individuals with no employees and who earn an excessive amount of money would be extremely limited, such a measure is unlikely to be implemented.
[7] In the early Soviet Union, in the period 1920–1932, Communist Party members were subject to a maximum wage, the partmaximum.
In 1933, Washington State Representative Wesley Lloyd proposed an amendment to the U.S. Constitution that would have limited annual incomes to $1 million.
[8] His contemporary colleague John Snyder introduced a companion amendment that would have limited personal wealth to $1 million.
[11] After decades of social democratic governments, the Swedish children's author Astrid Lindgren faced an infamous marginal tax rate of 102% in 1976, in effect creating a wage ceiling.
[citation needed] Many Green parties have a maximum wage in their manifesto, which they argue would prevent conspicuous consumption and the subsequent environmental damage that they believe ensues, while allowing the financing of jobs and a guaranteed minimum income for the poorest workers.
By the summer of 1928, players could earn a weekly maximum of £8 (equivalent to £609 in 2023[15]), although clubs routinely found ways to increase this.