People often assume that higher tax rates result in higher tax revenues. But in fact often the opposite happens, because people respond to (dis)incentives. For

People often assume that higher tax rates result in higher tax revenues. But in fact often the opposite happens, because people respond to (dis)incentives. For instance, when the federal tax rate on capital gains was lowered from 28 percent to 20 percent in 1997, the revenues rose from $54 billion in 1996 to $372 billion over the next four years, way above the projected $209 billion before the tax rate cut. [0] [0] Basic economics, Thomas Sowell, Chapter 14.