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But, with the higher tax rate, someone else might decide it's worth it to increase their labor by 40% so as to increase their post-tax income by 20%, whereas th

But, with the higher tax rate, someone else might decide it's worth it to increase their labor by 40% so as to increase their post-tax income by 20%, whereas they only would have increased their labor by 20% without the tax effect. So, it really isn't clear that higher taxes lead to lower amounts of labor.

prostoalex 14y ago
Except that someone will be hitting the external limitations (only 24 hours in a day, human body needs non-billable hours for sleep and food) pretty quickly. Also, this is true as long as there are no opportunity cost alternatives (spending time with family, pursuing hobby). In a nutshell, "High top marginal personal income tax rates are found to impede long-run productivity". Source on this is OECD, but original PDF link no longer works http://www.cato.org/blog/oecd-admits-high-personal-corporate-tax-rates-hurt-prosperity http://www.cato.org/blog/oecd-admits-high-personal-corporate...