“Does a tax on income stop people from working?”
Was that a rhetorical question, because the answer for many of us small business owners is YES, IT DOES. If I got to keep more of my money, I would work more. At the point where about 50% goes to state, fed, and local taxes, I stop.
Imagine being able to keep all of it. So what would you do with your extra cash, hoard it or buy things you've been wanting and needing. You don't get a choice with income taxes because you never see it.