please refer to my previous post:

building X produces 1,000 a turn. with a tax rate of 30 percent, you will make 300 a turn off the taxes. which means that you will have, lets say, -75 to town wealth growth per turn. that means that you can make 300 on turn 1, then town income is reduced to 925, giving you 277 on turn 2, then town income is reduced to 850, making 255 on turn 3. so you just made 832 dollars as opposed to 0. make that into al the towns in a given region, and you now have a large amount of lost money.
and i checked the other day; max taxes only give a -15 growth a turn. so its even more $$$