Raising taxes

Raising the tax rate on wealthy people will not bring in as much tax income as expected. CEO Jim earns $20 million and a new law says that all earned income about $10 million will be taxed at 90% including federal and state. This means Jim only gets one million from the last ten million he earned. He decides to forgo the ten million leaving it in the company for future investments and payments to stock holders. The company then gives Jim $10 million in stock options to be used after he retires. He will then pay capital gains tax when he sells the stock at retirement and that is currently at 20%. He does forgo the use of the money immediately but he can live comfortably on his base salary of $10 million.