Tax trap and top 1% income earners

People do not work to pay taxes. People work to earn an after-tax income. What that after-tax income is in each case, and how it is related to reported income and work efforts, is often far from obvious. Tax rates or retention rates are conceptually quite different. Grasping the difference is the key to understanding the ways in which taxes change economic behaviour and outcomes. When tax rates are high, small changes in those rates result in large changes in personal incentives to report income. When tax rates are low, small changes in those rates result in small changes in personal incentives to report income. High top tax rates disproportionately reduce incentives for the highest-income earners. When it comes to tax revenues, the higher a tax rate, the more likely that an increase in that tax rate will reduce tax revenues.