Taxes discourage production

In our modern world there is never the same percentage of taxation of income levied on every person. The taxes inevitably affect the incentive of people who are forced to pay the tax.

For example, if a company has to pay a large amount of money to government for tax while has to bear potential losses in investments, people may be deterred to start a new enterprise or the corporations may only invest in the area that is least risky. There may be fewer employers. Producers are not incentivized to make more productions or try to explore, which is risky. In the long run, customers cannot get better or cheaper goods, and the purchasing power will decrease.

Similarly, if a person's income is largely deprived of to pay the tax, employees may be discouraged. Besides, people are not incentivized to make relatively risky investments. The capital for risk-taking investments shrinks because it's taxed before it creates new capital. Capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. So don't tax too much!!!