It is said that progressive taxes may discourage people from working extra hours. What do you think about that statement?

Along with the development of the economy, the tax system in the world is constantly being updated to ensure fairness and efficiency for a country's revenue. There is an opinion that progressive taxes discourage people from working overtime. From our perspective, it is not the case due to the following reasons. To begin with, for overtime wages, the taxable person will be exempt from tax because the amount is paid higher than average working wages. In other words, the extra salary from overtime work is not taxed, so it will not affect the working psychology of employees because it is only calculated on the basic salary, while the benefits from overtime will not be affected. In addition, with an individual's income tax rate being not solely based on their gross income, the decision of working overtime for extra income is less impacted by the progressive tax. According to the equation of calculating personal income tax, taxable income is equal to total income minus exemptions. Therefore, higher rate taxpayers are able to register dependent person, contribute to retirement accounts, or open health savings accounts to eliminate the tax rate. By applying these methods legally, personal overtime wages will not be taxed, and taxpayers' net incomes are still high. In conclusion, a progressive tax is fairer and should be applied since a more significant portion of the tax is levied on overtime wage, which is nothing compared to higher total wages received. In addition, the government also provides tax incentives in the difference of that overtime wage. Therefore, the extra-paid worker will be willing to pay that tax cost, and it does not affect the employee's decision to work overtime.