I'm not sure what literature is out there. My own sense though is: 1. I personally am very attuned to marginal tax rates and opportunity costs. e.g. a. I won

I'm not sure what literature is out there. My own sense though is: 1. I personally am very attuned to marginal tax rates and opportunity costs. e.g. a. I won't pick up the extra shift because I'd rather be doing something else than earning $0.2/dollar. (This happened to me in my lower-income days as a student. Due to X hours/week of being a TA giving a tuition waiver, I would never work more than X hours due to the marginal income beyond X hours being so much lower) b. This happens to me today where I'll take long breaks between jobs I might otherwise not take. I take longer breaks than I would if we had a flat tax, because my loss of income is (1-marginal_rate) * salary, rather than the significantly higher (1-effective_rate) * salary. Similar thing applies in windfall years (e.g. IPO generating large taxable incomes), where I'll opportunistically take months off. 2. I've generally found others to be much less in tune to marginal rates, etc. So my hunch is that marginal rates are not that disincentiving as GP might suggest.