Motivating the top 1%
by Tom Sullivan
Whenever the subject of tax rates comes up, we never lack for pundits to argue that raising taxes on the highest earners will remove their incentives for working hard. What we do lack is 1) an explanation for why the motivations of the 1% are such a fixation and, 2) evidence to support the assumption-packed “hard work” claim.
The first unsupported assumption is that top earners make more money because they work "harder." Harder how or harder than whom remains unspecified.
A second assumption is that money is more powerful than all other incentives for working hard, including raw competitiveness, achieving a sense of autonomy, mastery and purpose. You think what drove Steve Jobs most was money?
Raising top marginal tax rates, say pundits, will hurt the economy because top earners will stop working and creating jobs (a third unsupported assumption). In libertarian fantasy, maybe, but that’s not what real people do.
A final assumption is that working "hard" is a public good we should not discourage – if not explicitly encourage – through public policy. If so, why all the concern about the work ethic and compensation of a mere 1.4 million Americans when no matter how much worker productivity surged over the last 30 years, 240 million working-age Americans’ incomes remained flat. Shouldn’t incentivizing their hard work be of greater public concern than just the few at the top?