[roenxi]

Woah there! You've basically just claimed that the laws of supply and demand don't have an impact in the labour market. That requires more evidence than finding a link between pay and intrinsic motivation/job security.

Nobody is going to turn down a flat wage hike - but the damage of government tax policy is it shrinks the window of "what the company will pay for" and "what the worker will work for". Now we can't measure this for sure, but theory tells us it is a very likely, if not practically certain, outcome. The issue is you won't see it, because companies will just not be offering some jobs because they experimented and couldn't offer them at a wage that interested workers.

As a bonus, raises are a bit of an illusion. There is a huge amount of new money entering the system from somewhere (see https://www.federalreserve.gov/releases/h6/20170406/, about 5% p.a. increase). Most wage rises in theory are to balance that out so that you have enough dollars to call on the same real resources for hours of your labour.

[Spooky23]

If your basic economic principle argument held much water, every investment banker would have moved to a lower tax locale decades ago.

The reality is that people weigh these costs against many factors and locales, clusters of business, family and institutions have powerful effects that add friction.

From a practical standpoint, the investment banker pulling in a $500k bonus in NYC with its 11.5% marginal tax rate doesn't move to New Hampshire because he'd take a 50% or more compensation haircut.