There is a common argument that by increasing taxes or redistribution, economic activity of entrepreneurs would go down. But I think this argument is false and

There is a common argument that by increasing taxes or redistribution, economic activity of entrepreneurs would go down. But I think this argument is false and can be empirically falsified. If you think about taxation, ultimately it reduces the pie of money that the entrepreneurs compete over. For instance, 50% taxes reduce the pie to half. The pie is roughly given by the size of the economy (market for the thing). However, in the real world, we don't see economic activity depend too much on the market size. In particular, we don't see small countries to have less economic activity (per capita) than big countries. That means size of the pie doesn't actually matter very much as an incentive for entrepreneurship. So you can have almost any level of taxation and people will still do it.