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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 16 2011: I think the lack of motivation taxes might cause are related with how you perceive these funds are going to be used. If you could trust completely on your government to spend it in a transparent and reasonable manner, then you wouldn't mind having to pay a little more.

    On the other hand if government did exactly that, they would't need to rise taxes :)

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