High marginal taxes are like anti-overtime, Shannon Love explains:
Progressive tax rates work like anti-overtime pay. Call it undertime pay. We are all familiar with overtime. It is an ancient idea based on the physical fact that it is harder to work the last hour of work than it is to work the first. The longer you work, the more difficult it becomes to keep working. In addition, to work longer hours you have to sacrifice in non-work areas of life, family, friends and relaxation. You don’t get to stop and smell the roses as much. We’ve all experienced this reality at first hand. As the job gets progressively harder and the tradeoffs more painful, people want increasing returns per unit of time worked. We call this increasing return “overtime.”
Ironically, it is leftists who have long declared it exploitative to the point of evil to pay people a flat per-hour rate regardless of how many hours they work. Leftists feel so strongly about this principle that they have encoded it into the labor law of every developed nation. They would explode with outrage at the idea of any policy that paid people “progressively” less per unit of time the longer they worked.
Yet this is exactly what “progressive” marginal tax rates do. With marginal tax rates, the more money you make in total, regardless of how hard you worked to make it, the higher the percentage of all that money that you pay in taxes. That means that you get paid “progressively” less per unit of time worked.
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You don’t need a degree in economics to understand this concept. You just need to have worked your ass off at some point in your life. That is why so many, regardless of their education, don’t get such a simple idea.
John in Boston notes that this analysis ignores an important Progressive principle:
If you believe, as Progressives do, that there is only a finite amount of income to go around, then hard working high earners are taking more than their fair share of that income. Making that additional hour of work unappealing, and thus unclaimed, leaves more work for the rest of us. Think of how the French like to create jobs: they declare by fiat that the 40 hour work week is now only 35 hours. Voila! Seven jobs (7*40) has just become 8 (8*35). Revel in the bliss of Progressive job creation!