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The higher the tax rate, however, the more incentive to avoid tax, through fair means or foul, which leads to a reduction in receipts.

Exactly.

As to CEOs & nurses - they probably do, but not to the order of magnitude that their income differs. But that is down to supply & demand, and luck.

My point was there is a physical limit to the amount of work someone can do, and I'm sure a lot of people approach this limit (and elsewhere in the world, are right on it). And the pay one gets is in no way related to that physical limit.