Saying this differently and with purposefully fake numbers, if (at your current pre-tax income) increasing your income by 50% would only give you 5% of that in cash you can use, would you really do that? Or do you have alternative use of your time (like leisure) that would give you more happiness?

You may say you would, but the reverse calculation then applies: if you would lose 5% extra cash by cutting your pre-tax income by 50%, wouldn't you do it? Many people would. Just look at the number of people who want to work 4 days or less.

Of course this assume income is a function of time spent working but it is very often the case.

The resulting elasticity will be different for everyone, but there will be a non null elasticity at the population level.

The effect may only be measured at the population level to take into account the difference between people, even if we can predict it is likely to be very low close to 0% and very high close to 100

That work is of little value to society or the government.