This argument is of course invalid, because if conquering the state and then taxing at the Laffer maximum is profitable, a conqueror will do it whether the current owner is taxing at the Laffer maximum or not.

However, I recently saw a slightly different, valid, argument, in Nick Land’s The Dark Enlightenment (Part 1), 2nd March 2012:

Political agents invested with transient authority by multi-party democratic systems have an overwhelming (and demonstrably irresistible) incentive to plunder society with the greatest possible rapidity and comprehensiveness. Anything they neglect to steal – or ‘leave on the table’ – is likely to be inherited by political successors who are not only unconnected, but actually opposed, and who can therefore be expected to utilize all available resources to the detriment of their foes. Whatever is left behind becomes a weapon in your enemy’s hand. Best, then, to destroy what cannot be stolen. From the perspective of a democratic politician, any type of social good that is neither directly appropriable nor attributable to (their own) partisan policy is sheer waste, and counts for nothing, whilst even the most grievous social misfortune – so long as it can be assigned to a prior administration or postponed until a subsequent one – figures in rational calculations as an obvious blessing. The long-range techno-economic improvements and associated accumulation of cultural capital that constituted social progress in its old (Whig) sense are in nobody’s political interest. Once democracy flourishes, they face the immediate threat of extinction.

Assuming that your enemies are within your tax jurisdiction, even in an advanced society it can make sense to tax them to prevent them amassing the resources to oppose you. Dead-weight loss and therefore loss of purchasing power can be worth it if the alternative is loss of power and therefore any tax revenue at all.

I used to rail against the dead-weight losses caused by most taxes, thinking they benefited no one. But maybe they do.

A third variant of this argument is that if you don’t tax at the short-run Laffer maximum you are not spending as much money as you could be on defence. However, this variant doesn’t work: there is no point wasting money on defence that could be safely taken as profit, and you might choose not to take it as profit in order to maximise long-term revenue (i.e. tax at the long-run Laffer maximum).