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You should consider the very basic economic concept of price-elasticity of demand. I might be able to raise it to 20x, watch customers disappear and make more

• mopsi 6y ago
  > I might be able to raise it to 20x, watch customers disappear and make more revenue. No doubt, but that trick works only up to a point, after which you start losing customers rapidly and the whole business collapses after a critical mass switches to cheaper alternatives. The Laffer curve is an illustration of that idea. Push vehicle taxes to absurd levels (85-150% in Denmark) and you'll have half the population cycling to work. Some such effects might be desirable and socially/politically worth the loss of revenue, others - like a switch from industrially produced alcohol to moonshine, and resulting deaths - not so much. Looking from Europe, the American obsession with low taxes over healthcare and general welfare seems short-sighted, but the expectation that you can infinitely raise taxes without ill side-effects isn't much brighter.