If governments tax people at 0%, the government obviously won't get any money. If governments tax people at 100%, the government also won't get any money, because there's no incentive to work. So if government revenue is at $0 at 0%, and also at $0 at 100%, there's a drop-off that happens as it gets higher and higher. It's called the Laffer curve, and I was most interested to read about it, and in more detail. It's interesting to note that by government reducing tax by a few points, they could stand to increase collections, and that there are always two tax rates that yield exactly the same tax revenues.