National taxation max tax paid on earned revenue collected incentive to work 0% average 100% tax rate More tax/last s=less reason to strive to earn More tax/$= more s collected per unit of economic activity · What to do ·| f we are left of max〓 increase taxes If we are right of max= cut taxesNational Taxation revenue collected 0 % max tax paid on $ earned incentive to work average 100 % tax rate • More tax/last $ = less reason to strive to earn • More tax/$ = more $ collected per —unit of economic activity“ • What to do: • If we are left of max = increase taxes • If we are right of max = cut taxes