Example: many believe the rich ought to be taxed more; but the problem is the Laffer curve: when they're taxed too much, they work less or leave France. So tax receipts go down (not up). End result: more "fairness" on paper but the people who actually depend on government funding have less of it (e.g. for education).
So the change harms the very people who are protesting for the change.
Has this literally ever happened, like anywhere? Yeah, the Laffer curve is a very real concern and a by-product of Rolle's theorem, but we don't even know where the supposed inflection point is, much less whether any given tax reform that would cause wealthy people to pay more would go over it.
> So the change harms the very people who are protesting for the change.
Human psychology is weird in that they might even be okay with this as long as the perceived fairness increases. But the only way to find out would be to do an experiment. That might also help us find the inflection point in the Laffer curve.
Without a global wealth tax (which seems impossible to coordinate) then I don’t see a good solution if the goal is to extract excess wealth from UHNW individuals. This is why a Georgist land value tax scheme is probably better; it levels out real estate speculation, which is a favorite parking lot for excess wealth and which has terrible side effects. Over time this will level out wealth inequality slightly, while forcing unproductive (rent seeking) wealth into the market.
I’m in favor of a single tax (just LVT), which economists say is possible, but if you must then you could also tax stock/bond profits (trading, dividends, coupons) at a higher rate. This may be a bad idea though if it pushes investors over to foreign markets.
The Laffer curve exists. It's heavily skewed to the right. Studies find the peak is probably about 80% tax rate, which we don't have to worry about accidentally exceeding.
The Laffer curve also only makes sense in the context of a government's primary purpose being to maximise its own revenues. This is clearly not how we want governments to work. If an increased tax on cigarettes causes less total cigarette tax revenue that would be widely considered a good thing.