The real issue is...
...and the reason why Laffer works....
...is because people find more and more creative ways to shield income as the marginal rate gets higher.
Lower the marginal rate and you increase revenue by both increasing spendable income (more spending, more econ growth, larger tax base) and giving less incentive to sheltering wealth.
[link|http://www.ncpa.org/studies/s159/s159.html|Long explanation]
[link|http://www.ncpa.org/pi/taxes/pdtx63.html|Shorter example]
And in your thinking, do not forget FICA, Medicare, Unemployment, State and local taxes, including sales taxes...when figuring total tax burden on citizens.
