If that's the only thing that motivates you, I don't think it would be any great loss to society that you stop doing whatever it is you do.

You certainly don’t know that, what an arrogant thing to say. Do you think garbage truck drivers work for personal edification?

I don't think garbage truck workers would throw in the towel and stop working because income taxes or wealth taxes went up. They're working because they need to eat.

If ohaideredevs is in such a place that he's able to stop working and not have to worry about being able to pay for housing, food, clothes, insurance, and all the other necessities of daily life, then that's great for him, but I guarantee you absolutely that the vast majority of the people in America would neither stop trying to make money, nor stop trying to make more money, just because some taxes went up. More money—even if a higher percentage of it would go to the government—just makes too much of a difference in the day-to-day life of most people for those kinds of concerns to be anywhere near strong enough to make it look unappealing.

So if someone who already has so much money that they don't need to work another day in their life stops trying to make money...or even if it's someone who makes so much that making more wouldn't reduce their stress in daily life no longer trying to increase their income...I don't think that's a net loss to us in any meaningful way.

You act like everyone is capable of doing everything. If ohaideredevs is a world class computer scientist, it would be devastating. The economic contribution of someone who can enrich our knowledge of data science or algorithms is thousands of times higher than blue collar labor. And you cannot just ask a worker in sanitation to start developing new deep learning techniques after you lose someone who can.

That's a pretty strong insult to someone for whom you have no idea what he does.

...why?

In a certain sense that's the goal:

> Our research on eighteen OECD countries shows that, between 1975 and 2008, there was indeed a strong correlation between reductions in top tax rates and increases in top 1 percent pre-tax income shares... higher top tax rates may discourage work effort... the incentives for [executive] rent-seeking are much stronger when top tax rates are low

> there has been no correlation between cuts in top tax rates and average annual real GDP-per-capita growth

Piketty wants to reduce inequality without damaging the economy, not specifically boost tax revenue from the rich. His claim is that raising top tax rates does discourage people from obtaining extremely high pre-tax incomes, but doesn't shrink the economy. There are several possible reasons for that, but the basic question Piketty cares about is whether you would stop being productive. Someone who trades off salary for a shorter commute, or spends less time angling for a raise, or even hides their money from taxes more effectively, is not necessarily producing less value.

If you lost your motivation to seek more than $500,000/year (remember, this is about the top bracket), but continued to do equally GDP-boosting work elsewhere, that counts as success for this system.

Almost every piece of acadamekc and practical research shows that this is not true (Ariely has 3 great papers on this).

People love things, power, sex and connection. Most of the things that lead to those things are exchanged directly or indirectly for money.

You’ll almost certainly always find a personal narrative as to why you want money.

The top marginal tax rate in the US only kicks in if you make more than $500,000/yr.

Unless you're already making that much, how does a higher marginal tax rate on income over $500k affect you at all?

because people don't vote purely for self interest. Maybe you are aspirational and want to earn that much some day. Maybe you believe it best for government to be less a part of daily life than more. Maybe you think higher rates will cause successful people to look for lower rate countries to take their talents. Or maybe, you think it is morally wrong for people to vote to grab money lawfully earned from others just because they can.

> Maybe you are aspirational and want to earn that much some day

Raising taxes on those already making that much makes it more likely, not less likely, that you will be able to do so.

OP stated: Unless you're already making that much, how does a higher marginal tax rate on income over $500k affect you at all?

So, if you want to make that much some day, then it would affect you when you do.

Further - raising rates on high income earners makes it more likely for others to make more? That seems dubious.

One argument in the original article is that an awful lot of that >$500k income is just non-productive rents levied on the lower income brackets anyway, so discouraging wasteful rentier behavior is a net positive (as it reduces inequality) without reducing productivity at all, since rents by definition aren't productive, they just siphon money into top earners' pockets rather than growing the economy at all.

Decreasing rent-seeking in top earners will leave more money on the table for everyone else.

If we're just talking aspirations, if (1-taxes) halves, then I'll just aspire to earn double. Earning 1M a year is almost exactly as plausible as earning 2M a year for the vast majority of people.

E.g. if it hurts the economy, like by slowing economic growth and lowering demand for labor. It would tend to transfer investment decisions from successful business people who like to grow their business to politicians who like to redistribute.

The linked article specifically argues that it would not hurt the economy. My question was how does it "kill motivation" to make money, really.

The linked article does a poor job of convincing skeptics, it only looked at nominal rates, not effective rates, and additionally confused the issue by looking at the first derivative of the top marginal rate. Finally, it didn’t even fix the marginal rate to an exchange-rate fixed income ceiling across countries.

Sloppy methodology with a conclusion in search of evidence.

To the extent that people are motivated to make money the prospect of making less of it reduces their motivation.

I would work less. A lot less. I'm at 7 days a week working, I would cut back to 5 days or fewer. Why would I continue to push hard for money that will just go to the government?

> I would work less. A lot less. I'm at 7 days a week working, I would cut back to 5 days or fewer.

Okay. So what?

If you make more than $500k, you're already sending 37% back to the Feds. If you're in a high-tax state you're probably sending significantly more. Increasing the top tax rate is just a difference in degree.

That sounds like a good thing.

Doing less productive things with my time because I am essentially forced to through the tax code should be considered heavy handed government interference in my life.

Somehow I think we'll find others to blast assess.

>Unless you're already making that much, how does a higher marginal tax rate on income over $500k affect you at all?

We're on the ycombinator website, presumably the concept of stock options is not foreign to those here. Taking less salary for years with the potential for an IPO is a lot less lucrative when your payout goes down by 50% due to taxes.

> Taking less salary for years with the potential for an IPO is a lot less lucrative when your payout goes down by 50% due to taxes.

Since we're talking about an increase in the top marginal income tax rates, sacrificing regular income for a chance of a big capital gains payout would actually be more, not less attractive, unless this was pared with treating capital gains as normal income—and even then, would probably remain more attractive if also coupled to provisions allowing spreading income spikes (whether due to one-time capital events or otherwise) out via advance and/or deferred recognition options, which is probably necessary for basic fairness if capital gains are treated as regular income—and actually that helps with fairness for some regular income patterns as well.

The top marginal tax rate is already 37% and kicks in at $510,300 for a single person. So if your payout is a million, say, then what happens is that your "less salary" (let's pretend you've slaved away for a pittance of, say, $200k) is taxed normally, and then the first $300 or so of your imagined payout is also taxed normally, but the last bit, the amount over $510,300, is taxed at an additional 13% over what happens today.

So if by "a lot less lucrative" you meant "13% less lucrative," then okay.

Why’s that? I’d happily take 17% of a billion over the ~50% of what I make now, average tech salary. I feel like tax rates are irrelevant to my ambitions.

In the past a lot of people have claimed they’d be demotivated about raising taxes, but it’s never stopped someone from being richer. More is still more, even if the government takes a greater share.

So you're saying it would get rid of people in powerful positions that were only in it for the money?

That you could finally relax and spend time doing things of value to you instead of acquiring wealth?

Sounds good to me.

> It would work on killing any motivation I might have to make money.

That's probably not true of most of the people dedicated enough to making money that they'd be subject to it in the first place, but to the extent it is, that's probably not a social problem; the rich maximizing their own income isn't always socially optimal.

You're really telling me that because you can't become a bazillionaire, you'll have no motivation to make money? You can structure a progressive tax such that the 83% rate only kicks in for income above $10M. Maybe you pay 60% from $1M-$10M. I think that's fair; it leaves plenty of money in your pocket to live a comfortable life well above the means of most people.

Furthermore, your ability to make millions is only possible because of the services provided by government (education, infrastructure, security, financial regulation).

Plenty of people are motivated by much smaller numbers. The average take-home of the top 1% is between $400k and $700k. We're talking about a bigger tax on the 0.1% (>$1M/yr), and a huge tax on the 0.01% (>8M/yr). Again, those brackets are only able to achieve outsized returns because they have educated workers and a stable legal/regulatory system. Because they achieve outsized benefit, they should pay a proportionally higher share.

If those amounts are enough to incentivize 99.99% of the country, and you're still making more than they are, I'm sure you'll survive. If not, someone else will take your place.

17% of a large number is still a fairly large number.

It would incentivize the purchase of pre-tax goods and services. Once you hit the top rate, anything your personal LLC could purchase (on your behalf) would be effectively subsidized. For example, the hiring of full-time personal assistants would become much more economically attractive.

You'll still make more than the next guy and honestly that's all people care about.

You would live in a city where everyone was doing well. Everything you make is as conditional on the world around you as it is yourself. If both thrive you might finally, actually, not just symbolically but truly thrive.

Once you get into top 1% territory, any scheme you have to make more money is likely to just be fleecing any workers or consumer public that you have under your thumb. This is a feature rather than a bug.