I'd contend that black markets for tax evasion are qualitatively different from black markets for restricted goods. Consider the hefty tax on cigarettes. Sure, there's a cigarette black market, but it's not nearly the majority of the market.
The (highly-opinionated) Tax Foundation did a study on this [0]. I'm not sure how reliable their numbers are (again: they're a foundation with an agenda), but if you read through their own spin, you can see that the big tax-based black market for cigarettes exists where there's a state-border disparity in tax rates, and even then, in 48 states the (estimated) black market took up less than half of the actual market.
So: set taxes at whatever arbitrary level, but don't go too high. Also, consider setting national tax rates instead. So many of our problems derive from state-level control of stuff. Delaware corporations, state taxes, state laws. But I'm just a poor socialist / federalist.
The (highly-opinionated) Tax Foundation did a study on this [0]. I'm not sure how reliable their numbers are (again: they're a foundation with an agenda), but if you read through their own spin, you can see that the big tax-based black market for cigarettes exists where there's a state-border disparity in tax rates, and even then, in 48 states the (estimated) black market took up less than half of the actual market.
So: set taxes at whatever arbitrary level, but don't go too high. Also, consider setting national tax rates instead. So many of our problems derive from state-level control of stuff. Delaware corporations, state taxes, state laws. But I'm just a poor socialist / federalist.
[0]: http://taxfoundation.org/article/cigarette-taxes-and-cigaret...