National taxation max tax paid on earned revenue collected incentive to work 0% average 100% tax rate More tax/last $=less reason to strive to earn More tax/$= more S collected per unit of economic activityNational Taxation tax paid on $ earned revenue collected max incentive to work 0 % average 100 % tax rate • More tax/last $ = less reason to strive to earn • More tax/$ = more $ collected per —unit of economic activity