I am paying 52% income tax rate in the upper bracket. I doesn't stop me from trying to increase my income.
Clarification - I am not making any claims as to whether I support this tax level or not. I am just saying it doesn't discourage me from trying to get ahead.
For my own account, I pay a similar marginal rate (my state tax is slightly lower than yours, but all in I’m at 50-ish percent).
That distorts my willingness to employ lower skilled help. I change my own brakes because the $250 in labor/markup that I might have to pay costs me $500 to earn. If I don’t have a productive way to earn more than $500 in exchange for the small time savings, my family is better off with my changing brakes than working on something else and a mechanic doesn’t get 2.5 hours of pay and some shop loses out on their cut. Same story for lawn care and other tasks that could easily help support employment of some workers.
Im pretty sure most people would: its working more time, for paying less taxes. An intuitive example of how taxation does affect the amount of time worked, at any income level.
Clarification - I am not making any claims as to whether I support this tax level or not. I am just saying it doesn't discourage me from trying to get ahead.