> People generally tend to work in exchange for money,

When they need it. Healthy retired people regularly do work for free in various charities and community work. Working people also don't usually seek to maximize their income, but balance it with plenty of factors.

> and the more money they earn thereby, the more effort they'll want to put in their work. (This broad idea is sometimes known as "efficiency wages"; it often leads to paying workers more than they could directly compete for on the market!)

This only works up to a point, you can't pay a taxi driver a million bucks in the hope of getting to destination 10 000 times faster. People do work better and harder when they feel they are fairly compensated vs when they feel they are being abused but that's it.

> Some independently rich folks may obviously choose not to work in any high-paid job at all, but given that they are, it makes sense to ask what motivates them.

And the answer is not the income proper, but everything that comes with such jobs and income, particularly “I'm making more money than Bob”. As long as Bob and him are being taxed similarly, then the actual amount makes little difference.

As I said above the marginal utility of money converges to zero the more money you have: a million dollar would change the life of the median US worker but wouldn't even be noticed by Tim Cook. (And even a billion doesn't change Jeff Bezos perception of worth an inch).

> In practice, it's often more important not to push too far away from optimality with punitive levels of taxation than to precisely match the outcome of any given theoretical mode

The concept of “punitive taxation” is in itself a political one, and again I can build a model in which the optimal income taxation is 100% above 1M and then say “we shouldn't push too far from the optimal” and that would be equally nonsense.