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Comment by smikhanov | Hacker News Reader

Nobody can be fully certain of this, but I suspect all the way up to 100%

We can actually be certain that humans work the other way since we ran huge experiments in labs called the Soviet Union and China. In those experiments we found out that people worked way less/not at all when there was no economic incentive to do so.

There’s an economic incentive for someone to increase their productivity at every taxation level that is less than 100%, no?

Technically correct, but totally missing the point. There’s going to be a big incremental incentive difference between, say 10% and 90% taxation.

Societies taxing their entrepreneurs at 10 and at 90% are always vastly different. This difference in turn heavily influences every participant’s system of motivations, so comparing these two numbers alone is usually not very helpful

An apt comparison is sharecroppers. Their effective tax rate is close to 100% but they still work hard because eating > not eating.

That’s not true. Many companies people work at provide them little to no incentive to work harder or better, yet still a lot of people try to do so. Lots of places have almost no possibility of promotion just the ability to go elsewhere. Some professions like teaching, nursing pharmacy treat all workers as interchangeable with no performance incentives.

People have an incentive in those cases. To improve themselves so that they can get hired at another company or in an industry with more demand.

Who pays nurses more just because they are good? In a lot of professions rates are set by governments or institutions and there is not enough competition between businesses for wages.

Any private clinic would pay the better nurse more? You can check this quickly on job-listing portals – nurse wages are in the 20000-100000k/year range, so clearly supply and demand as well as qualification are determining it. Which socialist country is it where wages are ceiled by the government?

I guess that depends on what you mean by good, but better credentialed, more experienced nurses do get paid more. Source -- my wife is a nurse.

I can tell you that there is no way I’d be doing what I do if it wasn’t for the money. I’d be developing useless keyboard firmware or some other junk no one but me would care about. It would provide minimal value to the world.

Sure that’s risky for 100% of population. But for 0.1 percent of population who makes many millions a year, who cares? No one is that special of a snowflake we need to optimize for their productivity. Most of those people are either already workaholics or already retired on a yatch.

Agreed. After all, that is the equivalent rate for all work done in the commons, on free software for example. Zero dollars earned, but somehow the incentive is still there. Money is not the only thing that motivates human beings.

Sure this works for creative endeavors. Now what would motivate someone to pick fruit in the summer Sun? Or clean toilets in a corporate office?

Sure you could say, "there are some people who just enjoy picking fruit." But are there enough people to satisfy the demand? And even if there are, what do you do with them as that demand decreases? The people who love picking fruit will have to clean toilets.

I believe this is why the income tax is so popular with economists. Other taxes create some type of negative feedback where raising the tax decreases transactions and shifts capital elsewhere. But with the income tax people have no choice but to keep working and may even have to work more. So the "economy" benefits because more labor/capital can be squeezed out of individuals without slowing anything down.

I wonder why people endlessly argue how much they should tax the rich and the poor, there is only one answer: 100% of everything, i.e wealth, income, gifts etc. It's a nice round number and everybody is taxed fairly.

North Korea called, it wants it's ideology back.

Wth. Are you trolling or what?

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