The link between happiness and income
Galloway argues that a person can experience significant happiness when their income jumps from $30,000 a year to $50,000, but beyond a certain threshold, additional income offers diminishing returns on happiness.
“The difference between anything above $10 million a year is nominal if non-existent,” he claims.
This echoes the findings of a 2010 study published by Nobel Prize laureates Daniel Kahneman and Angus Deaton which revealed that a rise in income can improve someone’s well-being, but only up to a ceiling of $75,000 a year.
Similarly, a study by Wharton University’s Matthew Killingsworth found that “policies aimed at raising the incomes of lower earners could do far more to improve overall happiness than simply giving bonuses to the wealthy or cutting taxes for the highest earners.”
With this in mind, Galloway suggests a more progressive tax structure could help resolve America’s wealth gap and economic dissatisfaction.
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Learn MoreProgressive tax policy
According to the Tax Foundation, a “progressive” tax system is one where high-income individuals or households pay more in taxes than low-income earners. Given that there are seven tax brackets, ranging from 10% to 37% for the 2024 tax year, America’s tax policy can be considered progressive.
However, Galloway calls for higher tax rates at higher income thresholds.
“Why wouldn’t we have, or restore, a much more progressive tax structure above $10 million a year?” he asks, explaining that such taxes would have minimal impacts on the well-being of ultra-wealthy individuals. “These people aren’t going to lose anything. They’re not going to be any less happier.”
The revenue generated from a more progressive tax policy could then be used for vocational training programs, or a child tax credit to enhance the well-being of lower- to middle-income Americans. “That will create a ton of happiness across our nation,” says Galloway.
From 1944 to 1963, America's tax system was far more progressive, with the top income tax rate exceeding 90% — peaking at 94% in 1944 for the highest earners, according to accounting firm Wolters Kluwer.
Polling data from this period suggests consumers were relatively satisfied with their lives. In March, 1957, 96% of U.S. adults said they were either “very happy” or “fairly happy” while only 3% said they were unhappy, according to Gallup.
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