Combined with Hauser's Law, it is an excellent rule to figure out when the tax rates become counterproductive and actually lead to diminishing returns, i.e. instead of growing the economy ("the pie") and tax revenues, they start shrinking the tax revenues.
Unfortunately, many economists make a mistake in calculating only federal income tax revenues in the USA, partly because it's ideologically convenient, partly due to difficulty to account for multitude of separate taxes, i.e., states and municipalities income and sales taxes (including use, "sin" and other taxes) as well as special purpose taxes, such as Social Security.
There is also no accounting to implicit "taxes" (business or personal expenses) caused by excessive regulations from federal, state and municipal regulations.
Reference to Kurt Hauser's Law :
You Can't Soak the Rich [Regardless of tax rates, federal tax revenue is always 19.5% of GDP] - FR / WSJ, 2008 May 20, by David Ranson
Comment on power of combining Hauser's Law with Laffer Curve :
You Can't Soak the Rich [Regardless of tax rates, federal tax revenue is always 19.5% of GDP] - FR / WSJ, 2008 May 20, by David Ranson
My recollection is that all U.S. governments spend 35% of GDP, sourced from all varieties of taxes and debt.
Next, about 10% of the U.S. economy is subject to coercive regulation that amounts to a pure government encumbrance of productivity, i.e. a tax equivalent.
So, I think the true total “tax” take is around 45%.
Therefore, we could cut taxes in half (towards the 22%) and the economy and Treasury receipts would boom!
But Democrats would get fewer “envy” votes, so it’s a non-starter.
Proving Democrats care about power, not ameliorating any actual problem with the increased revenues that would result.