"These decisions are invisible ... ", no, they are non-existent. People who want to work less to pay less taxes must be idiotic by nature because that's a zero-gain move.
In this situation you choose to work, since this maximizes your utility (1.1 > 1.0).
Now suppose tax hikes reduce your marginal take home income to $80, which only yields you 0.9 units of utility. Now you choose leisure, since 1.0 > 0.9.
This is true enough for the Tax-Me-More rich folks, but much more so for the Tax-Me-Not crowd who oppose just about any taxation--a belief often supported by little more than "anecdotal feelings" itself.
No they don't. Businesses have more to stand from capital gains (one mechanism of gaining that is growth via hiring) than owner salaries when the marginal:capgains ratio is high.
This last line has me confused about the first part of your reply