Optimal tax tax rates are lowered, revenue will be decrease by the same amount—and an economic effect—which provides incentives for individuals to increase their work output through low tax rates. These correspond to the mechanical and behavioural effects discussed by Saez. The Laffer Curve illustrates that, for sufficiently high tax levels, the (negative) behavioural effect will outweigh the (positive) mechanical effect of a tax increase, and so increasing tax rates will reduce tax revenue. In fact, tax revenue with a tax rate of 100% is likely to be 0, since there is no remaining incentive to work at all. Therefore, the tax
To each according to his contribution is derived from greater training requirements, job intensity, safety hazards, etc.—the more one is rewarded for the labor contributed. The purpose of the principle, as Trotsky would later state, is to promote productivity. This is done by creating incentives to work harder, longer, and more productively. The principle is ultimately a stowaway from capitalism that, according to Marx, will vanish as work becomes more automated and enjoyable, and goods become available in abundance. The principle has its roots in the way that capitalism manages its affairs. That is, each is rewarded according to how much he produces. Remuneration increases as