Yes. Everything can always have negative effects if it's quantity is out of balance - too much or too little.
I disagree that we're talking about poison though. That suggests something which is always "bad" if present in sufficient quantity.
Sure. But we don't call everything "poison".
Are you willing to say that there is no point at which the gap between wealth, independently of the income scale will be 'ok' or not produce any adverse effects?
"Any" adverse effects? That's also an unfair requirement (too broad by far). Overall effect on the economy and on economic outcomes for the population as a whole? I will absolutely state that not only is there no point at which the income gap alone can be said to produce those negative effects, but will also argue that statistically the correlation is reversed and that the economic outcomes for the population as a whole tend to be directly proportional to the income gap itself. In other words, a larger income gap tends to reflect a more healthy economy, greater economic opportunity for a larger percentage of the population, higher standard of living overall, faster technological growth, and a host of things that I would not only not label as "poison", but would argue are incredibly positive things we should be striving for.
As I have argued many times on this forum, what we're really measuring with that gap is the slope of our economic line. Graph earnings by percentile in order from lowest to highest, and the slope of the line is steepest where the "gap" is greatest. But that slope also represents upward mobility. It literally measures how much you gain when you move forward within the economy. And since the slope is scaled based on percentiles of the population it accounts for difficulty to make that move. Put another way, the amount of positive economic gain for every single individual within an economy is increased if the slope of that line is steeper.
That's a good thing, all the way around. There are other things we can argue are "good" or "bad", but saying that the gap makes an economy "bad" is not just wrong, it's completely backwards. The larger the gap the better off the people in the economy are. I know that sounds wrong because you've been taught to view that gap negatively your entire life, but if you actually step back and think about what that gap really measures and how it affects you and everyone else in the economy, you'll realize that what you've assumed about it is wrong. The gap measures ease of economic advancement within a given economy. That's it. Everything else remaining the same, a larger gap is good, not bad.
Edited, Nov 1st 2013 2:48pm by gbaji