This is something I posted to Twitter last night:
There's something I'm probably missing about the arguments around a higher marginal(!) tax rate. I've never been rich, so there may be a whole lot I just don't get, but the argument goes "highly paid people just won't bother to work more if the government is going to take most of the [additional] money." But
(a) beyond a certain amount of income, higher numbers _look_like_ (to someone who's never been rich) just markers for "keeping score", not money one could reasonably spend, & the IRS won't take the bragging rights, just the dollars,
(b) as Ada Palmer pointed out, getting to keep only ridiculous amount of money, not ludicrous amounts, won't slow down the "vokers", people whose work is a _vocation_ rather than merely a means to keep afloat (e.g. most artists);
(c) how badly do we need these people doing that _extra_ work on top of all the work they got paid for in a lower tax bracket / at a lower tax rate and still get to keep most of the income from (as opposed to maybe letting less established players into their field to do some of that work and get some of that pay)
-- these are bits I see other folks at least touch on, but there's one more that I haven't heard anybody else raise, which makes me wonder whether I'm just overlooking something because I don't know being rich:
(d) even if you can only buy so many yachts and sports cars before you run out of things to spend fantastic wealth on, one thing you _can_ do with that much money is give it away, and by choosing which charities to donate to, see to it that things that match your priorities get funded. Having so much wealth gives you agenda-setting power just by choosing which charities to fund. And charitable donations are pre-tax deductions, aren't they? So if you donate all your income that would have been in the highest tax bracket to charities (assuming it's less than 50% of your total income), none of _that_ money gets taxed; it all goes to furthering your priorities and agenda in the charity domain. So all that money folks are worried you won't bother working for still amounts to _personal_power_ to make things happen in the world. Is that not a motive for still doing the work that earns the extra income?
This doesn't help fund the government, one of the purposes of increasing the top marginal(!) tax rate, but it does mean that money is put back out into the world doing good -- if your priorities don't conflict with mine anyhow ;-) -- and flows into the economy where some of it will wind up in the government's hands by way of what the charities spend it on, and helping everyone the charities employ or buy goods and services from, thus stimulating the economy more _and_ distributing wealth a little bit. (I'm not sure how large that last effect will be.)
So: what aspect of rich-people finance and rich-people psychology am I overlooking due to unfamiliarity with that tax bracket?
(On FB, Jeffrey Huo replied to this with a ink about how yes, money = scorekeeping for the ultra-rich: https://www.theatlantic.com/family/archive/2018/12/rich-people-happy-money/577231/?fbclid=IwAR0KptBMSLb-e1z4opSBzvRt-iNEgsATO2VZnpXN4HX5bi10sWLdEUC02tc