Check out this excellent piece by my good friend Dan Mitchell of the Cato Institute, showing that once again the Laffer Curve rules:
Let’s look at some evidence from Spain to further confirm that high tax rates aren’t necessarily the way to maximize tax revenue (this also is a story showing that tax competition between nations is a good way of disciplining governments that are too greedy, but that’s another issue). … Much of the decline in corporate tax revenue can be attributed to Spain’s dismal economy, of course, which has been exacerbated by a bunch of tax hikes imposed by a supposedly right-of-center government.
Go here for the full story. And make sure to keep reading his blog. Dan is a very good economist and a globally recognized expert in tax policy.