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Each nation brings in a certain income each day in the form of taxes. The amount of taxes brought in each day is equal to the nation population * average daily income * tax rate. The tax rate also has a negative effect on national happiness, lowering average daily income, but is always offset by the increase in income.

Tax Rate Happiness Penalty
7% -0%
9% -0%
11% -3%
13% -3%
15% -6%
17% -6%
19% -9%
21% -12%
28% -15%

Strategy Edit

Your tax rate should always be at 28%, as the income boost outweighs the happiness drop.

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