A higher tax rate may or may not lead to higher tax revenues or a lower rate to lower tax revenues. If taxes rise by 10%, the takings may counter-intuitively decrease as people move out of the heavily-taxed jurisdiction or buy less of a heavily-taxed commodity. Oregon raised the income tax for people earning over $50,000 and lost $50 billion.
In the United States, capital gains tax was lowered from 28% to 20% in 1997. Revenues from capital gains tax subsequently rose, almost doubling the projected $209 billion over four years. When the government lowers tax rates, investors are more likely to move money from tax-exempt municipal bonds to invest in goods and services production because they will keep more of their gains. As Iceland reduced the corporate tax rate from 45% to 18% over ten years, their tax revenues tripled.