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>more money in your pockets is to get paid more money Sure, I agree with you on that. You have to consider the effects on an additional unit of effort put in a

by ovi256 7y ago

>more money in your pockets is to get paid more money Sure, I agree with you on that. You have to consider the effects on an additional unit of effort put in at that job. Progressive taxation sets up steeply diminishing returns on that marginal effort. And incentives to spend that effort on alternatives with better returns, like shopping for tax-sheltered investments. Because a salary's not the only income professionals have. So you can effectively make tradeoffs between revenue streams with different tax rates, one of which happens to be your job. This clearly disincentivizes creating additional value for society through an additional unit of effort at that job, and it's a result of market structure.

Dylan16807 7y ago
What revenue streams does someone have that don't count as income and take a notable amount of time input? Most investments don't take any significant amount of time to set up. And it's likely that whatever they're doing to get money should simply be counted as income too. > This clearly disincentivizes creating additional value for society through an additional unit of effort at that job Whatever they do instead might create less value for society, or it might create more value for society. I have no idea what the average is. Also we have to look at the opportunity cost. By taxing one person with a huge income more, you can tax dozens of people with lower incomes less. In most cases that's a huge boon for society. > Progressive taxation sets up steeply diminishing returns on that marginal effort. Steeply? Bah. When you're talking about millions of dollars, removing 37 percent (or 50 or 70) still leaves an enormous incentive. The thing that actually causes significant diminishing returns is that every dollar you earn benefits your life less than the previous dollar.
- ovi256 7y ago
  >you're talking about millions of dollars I never meant millions of dollars. This argument applies to middle class incomes too.
  - Dylan16807 7y ago
    Middle class income is below 37 percent marginal tax in the US, and they're not super high anywhere I'm aware of. "steeply diminishing returns" definitely does not apply.

by ovi256 7y ago

Dylan16807 7y ago

What revenue streams does someone have that don't count as income and take a notable amount of time input? Most investments don't take any significant amount of time to set up. And it's likely that whatever they're doing to get money should simply be counted as income too. > This clearly disincentivizes creating additional value for society through an additional unit of effort at that job Whatever they do instead might create less value for society, or it might create more value for society. I have no idea what the average is. Also we have to look at the opportunity cost. By taxing one person with a huge income more, you can tax dozens of people with lower incomes less. In most cases that's a huge boon for society. > Progressive taxation sets up steeply diminishing returns on that marginal effort. Steeply? Bah. When you're talking about millions of dollars, removing 37 percent (or 50 or 70) still leaves an enormous incentive. The thing that actually causes significant diminishing returns is that every dollar you earn benefits your life less than the previous dollar.

ovi256 7y ago
>you're talking about millions of dollars I never meant millions of dollars. This argument applies to middle class incomes too.
- Dylan16807 7y ago
  Middle class income is below 37 percent marginal tax in the US, and they're not super high anywhere I'm aware of. "steeply diminishing returns" definitely does not apply.