I'm not an economist and I don't play one on TV but if memory serves me correctly from my college economy classes there is a basic principle that raising the price of a good will increase revenue to a certain point. That point is the break even point. Raising the rate beyond the break even point will result in a corresponding decrease in demand and therefore revenue.
It seems as though the Hauser Law follows this same principle. Taxes are increased beyond people's ability to pay. Consequently tax collection is less. This applies at least somewhat to Alexander Hamilton's observation about collecting a taxes in his Federalist paper #21 even though he was referring specifically to a consumption tax. To quote:
"If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds."
The problem with the income tax is this break even point is far less transparent with the income tax making it more difficult to determine when taxes become excessive because it gives the select few who run the government too much power to set the tax rate. The Fair Tax will be far more transparent by showing the actual rate to the taxpayer with every purchase and will give the people much more power and freedom over \Congress by enabling the people to determine what is the proper amount of tax to be collected. Fair Tax ping!
