Yes I do know that. It's still a big disincentive to bother earning more money.
Why bother trying harder if the government will take half of anything extra you make?
Why bother trying harder if the government will take half of anything extra you make?
However, I feel that I'm already paying the government FAR more money than I should be, so I'm simply not bothered about trying to make them more money.
Given a hypothetical luxury good with a price of $500,000 under a current taxation regime, which do you think is more likely in a regime with, say, 50% higher taxes: That the luxury good ceases to be produced, or that its price is lowered to the point where a similar number of people as before could afford it?
To answer your second question is impossible - we don't know the shape of supply and demand curves nor do we know the initial rate of taxes. E.g. if the original taxes had been 1% then it's just going to bump the price a little bit. If the original taxes had been 50% then it ceased to be produced.
But if you want to know the general relation of taxes and supply and demand consider how things are going to progress as you keep raising taxes. Do you seriously believe prices are going to fall as the taxes raise?
What matters is the people who are actually paying the bulk taxes and making investments.