I came across this a while back and thought I’d share it, since I think it gives the basic and most important reason for charging what you’re worth. (Originally published here.)

“The more I charge you, the more pressure I put on myself to perform for you.
The client who grinds me on price is the least satisfied. He gets less attention from me and is most likely to be pissed off at me. And I don’t really care, because to be honest, I resent him. The very fact that he is on my roster reminds me that I’m part prostitute. For him, I’m doing it for the money and as it isn’t very much money I’m not troubled by not doing it well. He pays me a paltry sum, I perform poorly, he gets angry and I resent him. We can have that type of relationship if you like.
The client who pays me the premium gets my best work. He’s the one I wake up in the middle of the night thinking about, wondering if I’m doing all I can to earn his money. When he calls, I jump. Hell, I call him first. I take pride in moving his business. I try to make myself indispensable to him. I imagine that he winces when he opens my bill (he doesn’t say), but he thanks me for all I do for him. He’s the one I worry about.
I’m great at what I do, but if someone hires me without giving me the resources (money, time, access) to do a great job, it’s easy for me to rationalize poor performance. When a client gives me everything I ask for, he removes all the obstacles to a high quality outcome. There’s no way for me to rationalize anything less than perfection.
There is no greater pressure than the pressure I put on myself, and the only way you can add to my own sense of pressure is to pay me well. Yelling won’t do it. Neither will threatening to pull your business. My deep sense of obligation comes from you paying me well enough to dispatch all of the excuses. Then I have to prove to you, and, more importantly, to me that I am as good as I say I am.
So, I’ve given you my price and it’s the price that I need to charge to bring a deep sense of obligation to the job. Will I work for less? Probably. Can you negotiate with me? Sure. We can have that type of relationship if you really want me to be that type of designer and you want to be that type of client.
Let’s just understand each other before we get started.”