Sometimes I wish I could have 10 million dollars. Then I'd be happy. According to this link, as one earns over $40k a year, the utility of each dollar earned decreases. This is the rational for our ability-to pay-tax philosophy. Taxing those with a lower value of money doesn't reduce happiness.
A man was in court for failure to pay his fair share of income tax. The man protested giving a long winded rebuttal. The judge found the man guilty and sentenced him to community service working the poor. The judge defended his decision saying that the man taxed his patience.
Actually, your chart may actually show the marginal propensity to consume. That's the desire or likelihood that each successive dollar will be spent.
ReplyDeleteNow, as we know, there's only two things one can do with money - spend and save (invest). If I'm not spending, I'm more likely to save (invest). I think maybe it's a matter of those over $40K not being happier with spending. However, they may get satisfaction out of saving, whether it's active investing or social investing or whatever. Just a thought.