Hacker News Reader

Comment by jeremyt | Hacker News Reader

This is just false.

Even Slate, which is hardly a right-wing bastion, concedes that there is an effect (http://www.slate.com/articles/news_and_politics/explainer/20...)

If we subjected you to a 99% tax rate tomorrow, would you work less than before? A yes answer is all that is needed to concede the point theoretically. Then, we're just arguing about magnitude. And I just don't believe you if you answer no: Who is going to work a full-time $50,000 a year job when they're only taking home $500/year?

For further reading, Paul Graham has argued that redistribution through higher tax rates leas to less entrepreneurship (http://www.paulgraham.com/inequality.html)

View on HN

This argument assumes that there is a monotonic effect of taxes on my desire to work. I'd argue that if taxes were raised a little, I would work a little more. I think therefore that it is more reasonable to assume that the taxes->work hour function is concave.

I'm willing to concede that the effect is uncertain at low and middle incomes, but I think it has been shown quite convincingly that when tax rates go up the rich work less.

If you suddenly went from a 30% to 40% tax rate, couldn't you imagine working more to make up the difference? There is a lot of social pressure to maintain lifestyle. American wages have stagnated since the 70s and people are working longer hours than ever.

To answer your question honestly, it's going to depend on how much disposable income I have.

If I'm making enough to pay for all of my needs and wants after the rate goes up, then I'll probably work less... Because what's the point?

If the difference is whether I can pay rent or not, then I'll probably work more.

Reported income is not comparable to effort or economic activity.

The Slate article states that when income tax rate increases, the rich report less income, by fudging their taxes. It says nothing about rich people expending less effort.

You should read paragraph number 5 again. It concedes that at least 25% of the reduction in reported income is due to working less.

Yup. One of the options for a middle class couple is the non breader winner of a middle class couples could decide to work less.

I reread your comments (upthread). I imagined you were trotting out the "discouraged rich people" trope. My apologies.

Well, to be fair to you, I was trotting out the discouraged rich people trope.

It's rich people who have the most elastic working hours and income.

Reply on news.ycombinator.com