Originally Posted by
fungus pudding
Study up Laffer economics, specifically the Laffer curve, and you'll find it's indisputable there are two levels of tax, one high and one low, that will produce the same result. In simple terms lowering the tax rate can often produce as much or more revenue than raising it. If too low obviously it will not provide sufficient revenue to run Govt; but if too high it won't either because of disincentives, driving transactions to the black market, under the counter trading etc, or worse still - lack of trading. The trick is to find and apply the lowest effective rate.