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Dan Ariely

Professor, Duke

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What are the effects of taxes on motivation and productivity?

One way to fight the budget deficit and income inequality is to change the marginal tax rate. The question is what are the implications of such change.

Some people think that this will cause the wealthy to stop working, others think that this will cause everyone to stop working, yet others think that a long as we care about how we do relative to others an increase of the tax rate will have no effect on effort and productivity.

What do you think will the effects of increased tax rate have on you and on the people you know?

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    Feb 15 2011: Having lived in a so called developing country with a known corrupted system, the problem as I see it, is not the cut or increase in taxes, but how the money collected is used. Administrations in government may get away with their bad administration or misused of funds, but sooner or later people will react to the effects in their pockets or in their hearts. The timing of a society to react would depend on its mindset and maturity.

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