What happens when tax rates are above the revenue-maximizing point on the Laffer Curve?

What happens when tax rates are above the revenue-maximizing point on the Laffer Curve?

When tax rates are above the revenue-maximizing point on the Laffer Curve, it leads to a decrease in tax revenue. This is because higher tax rates discourage economic activity and incentivize tax avoidance or evasion. As a result, individuals and businesses may reduce their taxable income or engage in underground economic activities to avoid paying higher taxes. Therefore, the government collects less revenue despite the higher tax rates.