As a CPA, I have pondered this question often. I believe that somewhere around 6-8% is the point where most people do not change their behavior, meaning most will pay the tax rather than worry about ways to avoid it. interestingly this is the amount of most sales tax or commissions on large purchases etc.
After that, for larger transactions I would see my clients wanting to take tax avoidance steps to about 15% and avoid taxes on any transactions beyond 15%.
At about 30% or more, most clients would be willing to consider deferring a transaction or giving up control in order to avoid or delay a tax.
In excess of 50%, most clients become very risk adverse and will avoid investing in profit making activities if they have sufficient income to meet their needs.
At 60-70%, most clients would rather give the money to their employees, charity or in bad investments rather than pay the tax.
Thanks for the interesting information.
So what would you consider the marginal tax rate that would bring in the greatest amount of revenue?
25%? 40%?