When "labor" is taxed that much? Are you including CEO pay packets in the "labor" category? I'm not saying that is illegitimate, it was the mantra of the Republicans before the Great Depression, that working for a living included all jobs. (Gerring, 1998, Party Ideologies in America 1828-1996, pp. 59-64) It is certainly the case that, as taxes increase, the dodges increase. Other arguments say that the steeper the penalty for any crime, the greater the deterrent. Personally, I think the tax code should get increasingly progressive, even after annual incomes of 1 billion dollars. I like to use a conic section formula for tax rates.