People would still have every incentive to work to improve their lot in life; most people on HN probably have the capability to quit their jobs and live off of welfare checks, but it's not exactly a great lifestyle, even if it doesn't require any work. In fact, people might have more incentive than they do now to try out new, interesting work; knowing that if everything blows up they won't screw up their lives and the lives of their families is a great asset.
Overall, I imagine society would progress tremendously if everyone were able to get an education and do creative work while being guaranteed the basics of life, even if that results in some freeloaders surviving on the dole.
Has this ever happened? Has anyone at any wealth level ever simply stopped making money because he was upset about taxes? I hear a lot of small-time sole proprieters talk about it, but I've never heard reliable reports of it actually happening.
A quick summary is that yes, people probably do choose not to do certain kinds of work when taxes are too high, but not in the way that Bill O'Reilly tends to advertise it - it's unlikely that someone is going to quit a high-paying job because their marginal tax rate went up a point. However, if you're undertaking an endeavor with a 5% chance of success, and a 30x tax-free payout in case of success (relative to a safe option), your expected payout is 1.5x with no taxes; 1.35x with a 10% tax rate; and 0.9x with a 40% tax rate. Whether or not you'd take the risk in the first two cases varies from person to person, but in the latter scenario, most people wouldn't bother; you'd have better expectancy at a roulette table.
Yes, it happened to Ronald Reagan. When the top tax rate was 90% (he was an actor at the time), he chose to make only two movies/year. He saw little point in making more movies since he wouldn't get paid for it.
http://toomuchonline.org/the-tax-that-turned-ronald-reagan-r...
Those who are self-motiviated, and those who aren't. Or rather, there's a continuum. Most people aren't that self-motivated so they mostly do nothing.
Those who are, will continue to contribute to society regardless if they got paid or not.
http://en.wikipedia.org/wiki/Agrarian_Justice
The US Social Security administration keeps a full text of the pamphlet online:
This, this right here is exactly the kind of puritan thinking I find infuriating.
Seriously, leisure as a terminal negative term in your utility function?! Never mind the people who are going to use the time to learn, to create art and share it, to spend time with their families -- if we don't shackle people to their counters and desks, they'll be rioting in the streets!
How much theft/violence do you think is driven by need, by looking for a way to get by? If anything, I would expect violence and theft to go down.
Art and study could certainly be more heavily subsidized, though. But I would count those as types of work.
