Not always. Low tax can allow enough economic activity as to bring in more income than higher taxes. This is most obvious when you take a tax rate of 90% and reduce it, and there is big debate on where it breaks down when rates are already lower.
There’s some manifold of Pareto-optimal solutions to the problem of taxes and services.
California, for example, spends a lot of money to get not-great public schools, and has housing costs that are out of control. So if you’re importing new hires from other states, and pay them a lot to live here, and personally pay high taxes on top of that… that doesn’t seem like a Pareto-optimal point.
At some point, the wealthy will decide to move someplace that looks more Pareto-optimal. Better externalities, lower taxes, or both.
https://bipartisanpolicy.org/issue-brief/what-a-new-laffer-c...
FTA: For years, policymakers and economists have debated the shape and peak of the Laffer curve, a theoretical model suggesting that if top tax rates increase beyond a certain point—called the revenue-maximizing rate—they will yield negative marginal revenue.
A new paper from economists at the Joint Committee on Taxation finds that the Laffer curve is flatter than previous theories have suggested, meaning the revenue-maximizing “rate” might be a broad range rather than a single point.
Lawmakers looking to raise taxes might find it difficult to raise substantial revenue from top rate increases; however, broadening the base, examining untaxed sectors, and reducing the tax gap represent promising pathways to closing the gap between revenue and spending.
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I'm glad they highlighted that instead of increasing the tax rate, broaden the tax base. For example, if they treated borrow-spend-die as income. We could keep a lower tax rate. The same argument could be made for eliminating the estate tax. Treat inheritances as income for tax purposes.