> taxation of an individual's economic output in favor of redistribution damages his incentives to work
The part I keep increases my incentive to work.
"You know, I really want that promotion, but since the government is going to take some percentage of the associated raise, fuck it, I quit," said no one ever.
[EDIT] I had a rant here, but I'm going to replace it with the blatantly obvious counterexample: working mothers.
Consider working mothers in two-income families. Consider those who quit work to spend more time with the kids. Do you think that maybe there's one of these women who, if she were granted immunity from taxes and made an extra 50% in take-home pay, would choose differently?
The rest of the reductio-ad-absurdam is left as an exercise to the reader. I'll remind the reader we seem to be dealing with a hypothetical redistribution of such a scope that we must lift the third world out of poverty before we can spend money on our own kid's cancer treatment or whatever.
Well, if you'd like to be obtuse and miss the point: the difference would presumably be split between employer and employee in a manner determined by the price elasticity of supply and the price elasticity of demand. See: http://en.wikipedia.org/wiki/Tax_incidence
The part I keep increases my incentive to work.
"You know, I really want that promotion, but since the government is going to take some percentage of the associated raise, fuck it, I quit," said no one ever.