|This is instructive to me as to why government spending needs to be justified on larger grounds than "well, that sounds like a good idea." (Ignore the theoretical nonsense about incentives to work, i just thought the numbers were eye-opening):|
Clark notes, rightly in my mind, that all this incentive to work stuff is total bullshit, but you see economists doing these calculations all the time. Humans don't think like this, nor should we. I work because I enjoy what I do, and sitting on my ass all day, while nice every once in a while, is not really a good long-term plan for my mental sanity. Sure, humans compare offers -- if Job A pays me $X, and Job B pays me $Y, then I can weigh my options. Further, most people don't really control how much work they do anyway -- you get paid a set salary and you have a given amount of work to do, so there's really not a lot of choice in the matter, and certainly not the level of detail of so-and-so's tax plan means I'll work until 4:45 every day, but under the other guy's, it is worth my while to stay until 5:15. You'll work harder if you're motivated (either internally or from fear of losing your job) by whatever you happen to be doing, not by calculations of marginal tax rates.