Here is the thing that should be considered. Keep in mind that if no taxes are changed, then there should be no effect as well. Also, there should be a way to either set a flat tax or a tax depending on how much you earn.
If you increase taxes:
Increased Revenue
This one is obvious, this should go hand to hand with how MUCH the typical worker is working.
Increased chance of Rebellions/Crime
With people getting all their money away to the state, some ought to be mad. This will result in an increased cost of policing as well (Cost of Government).
Decreased Productivity/Welfare
People just won't be in the mood to work to get all their money robbed, so this will be hit exponentially.
In summary, it would be generally okay, but the severity of the effects MUST also be dependent on how much the citizen is getting paid.
If you decrease taxes:
Decreased Income
Less money to spend on, you aren't getting a bigger share of the pie.
Decreased chance of Rebellions
With everybody having money, no people would rob or riot, thus decreasing the chance of riots as well as less policing (Cost of Government).
Increased Productivity/Welfare
This would be because people are keeping more of their money, and feel more active to work.
Increased Immigration
The migration section of Simcountry is rather weak and doesn't play a big role in a nation, unlike in the US with many immigrants that keep the population increasing. Point is that migration should be fixed. More people would come since they keep more money. This may go the other way if taxes are increased.
Please give me some feedback, thank you.