I think it was pretty nice of you to use a linear scale. If a company wanted that much more of my time I would have quoted them a premium (just as an hourly employee might make overtime in such a situation).
Exactly. The utility of income is not linear. The first 10,000 dollars are much more useful than going from 190,000 to 200,000 a year. That's why the tax system has a progressive structure. If you want me to work 10% more then you need to pay me more than 10% more.
And that does not even consider that my free time is very limited. If I have say 2h of completely free time everyday (24 hours minus work, commute, chores, gym, household crap, etc) and I need to work just 1 hour per day longer, then that cuts my free time per day in half. That is HUGE. You better pay me a lot for that.
There utility of disposable income is perhaps not linear. But I can tell you I enjoyed my second raise a lot more than my first. My first raise gave me just enough to start saving money over time, no room for quality of life improvements. My second raise is what allowed me to start spending money to enjoy myself.
What the tax system doesn't respect is that my life might be better and more productive if I spent a year earning 200,000 and then took a year off, then if I worked a 100,000/year job the entire time.
I thought someone would say that :), that's a combinatorial optimization that happens to work in the exact scenario I described, and assuming no further constraints.
But you lose out if you instead want to do 2 years on 2 years off, or if your one-year employer doesn't want you to work July to June, or if your year-off plans don't work July to June, or any number of more complicated scenarios. My point stands that the system isn't designed to support this kind of irregular high-income work.
