No, the income tax doesn't really hurt the top guys all that much, they can take care of themselves. But, it _does_ hurt the businesses. The businesses are forced to raise the prices for their goods and services to pay the taxes on their operations, and they _don't_ get that money by diminishing in any way the salaries of the top guys.
The DO raise the prices of their products, and the DO lower the pay of their workers, and they DO reduce the payout of the dividends on their stocks. The money that the public would have saved and the money the employees would have earned and the dividends that the investors would have enjoyed instead is stolen by the US Gov't.
I say stolen because it is taken by force by people to whom it does not belong. I've come to the conclusion, after a lifetime of attempting to rationalize it, that income taxes are purely and simply stealing. I can find no good reason to excuse the gov't from that charge. The gov't doesn't have the right to everyone's property. It has the power to take it, but not the right. No kidding, I always used to wonder about that as soon as I heard about it in grade school, "What gives them the right?" Well, they don't have the right, simply the power.
You should take a much closer look at the Fair Tax. The FT is the only tax so far proposed that is truly progressive. The income taxes aren't - Warren Buffet ends up paying 14%, and his secretary pays, what was it, 18%? What's progressive about that? The payroll taxes supporting social security and Medicare cease being collected at the point that the person makes about $118K, but are collected from the 1st dollar that a poor person makes. A poor person that makes $12K / yr ends up sending 15.3% of that to Washington, DC.
In contrast, the FT "prebates" each citizen with the amount of $$$ that they would need to pay the FT on poverty level spending. That is, if one is single, and the poverty level is $12K, that person would receive 23% of $12,000 each year to pay the FT on all the things he would buy up to the poverty level. So, that person will get $2,760 each year, divided up into 12 equal monthly payments. It doesn't matter whether that person is a single person that is as rich as Bill Gates, or your favorite street person panhandling on a street corner, he will get that prebate.
Due to the prebate, no person effectively pays the Fair Tax. When he buys something, he reaches into the pocket with the money he earned or panhandled or whatever, and pays the price of the item he's buying, and then reaches into the pocket that has the money he received from the gov't as a prebate and pays the Fair Tax. That pocket will continue to provide money to pay the Fair Tax all the way up until he spends his last dollar that is at the poverty level for the month. Then, the prebate runs out and the person has to start paying the Fair Tax on remaining items he buys for the month, until his next prebate check comes the following month. Of course, if he's making poverty level wages, he is not capable of spending more than the poverty level, and so NEVER pays the Fair Tax himself.
And I took a look at the Flat Tax once upon a time and discovered that while it purports to give a break to people for the first $X dollars they make, which I think was somewhere around $18K, it DOES NOT repeal the payroll taxes. Therefore it charges its 17% flat tax rate to _AND_ the 15.3% payroll taxes to the person starting at $18K (or whatever the exemption is, I forget) and so the middle class pays 32.3% tax to the gov't, while the payroll tax stops taxing the rich at around $118K, so the rich making much, much higher than $118K end up being taxed very close to 17% Flat Tax for their entire earnings. Poor: 15.3% Middle Class: 32.3% Rich: 17% plus a fraction. Progressive? Nope. Only the Fair Tax is progressive.
And there are side benefits to the Fair Tax such as not having to spend $13B on the IRS, since the states collect the monies, and we can even go green by not cutting down 300,000 trees every year to print IRS tax forms.
Oh, where does the tax burden really fall if the Fair Tax is enacted. It gets spread around, to be sure, but it falls probably most heavily on the rich. That is because of their insatiable desire for the toys of the rich. We buy a Chevy, they buy a Maserati. If you look around the net, you can find that John and Teresa Kerry haul down about $5M between them, and pay about $1.8M in income taxes. But, they bought a $70M yacht. Fair Tax on a $70M yacht would have sent $21M to the US Treasury. It would, in contrast, take John and Teresa about 12 years to send that much money to the US Treasury via the income taxes. And then of course there's the criminals that don't pay income taxes at all, but would pay the Fair Tax when they build the mansion overlooking the city they are destroying via their criminal enterprises, and the moonlighters that work a 40 hour job, then drive taxi for 50 more hours and never whisper about the income from driving, and the illegal aliens that don't pay squat, or in some cases file fraudulent income tax returns claiming 16 kids that don't exist in order to get credits for them that result in even more money being "returned" to them from the US Treasury than they ever paid into the Treasury from any withholding they may have encountered, and even foreign tourists get to contribute when they visit and buy souveniers, or expensive airline tickets and motel stays.
And the bottom line is that, since 22% of the price of things built in the USA goes to pay income taxes, relief from that burden will cause the prices of American-built products to fall. That's what we want, so that we can sell more competitively to the American People as well as to those on the other end of an export shipment. We are incredible boneheads to tax our businesses and allow all that embedded tax to hurt the US businesses that are trying to export. While not all 22% of the income tax expense of manufacturing in the USA can be recovered, since some of the things costing US businesses money are things like their worker's personal income tax that raised the prices of American manufacturing, things like our highest-in-the-world corporate income taxes will be recovered. The best guess is that prices of US products would fall by 11% - 18%. If prices of a Jeep Cherokee built in Toledo, Ohio would fall from $35K to 11% less $31,150, that would be very significant to an export buyer. They might buy the Jeep over a Toyota FJ Cruiser that was also $35K, and will not have a lower price because their factory in Japan did not receive any relief from the repeal of the US income taxes.
I firmly believe that the Fair Tax will restore prosperity to America, and everyone, but especially the poor and middle class, will disproportionally benefit due to the return of jobs from overseas. Having the US poor and middle class "disproportionally benefit" is a very good thing, and will relieve the Federal Gov't of a lot of welfare / food stamp / unemployment / disability payment expense. I'd put it into effect today if I could.