Rejected.
First, there is already an advantage/incentive: Your people are happier.
Two, it's a neo-liberal legend that doesn't fit to the BM world. Nobles would always try to get as much taxes as they could. Also, there is not that much evidence that lower taxes do have a positive economic effect. Sounds silly if you've listened to too much neo-liberal propaganda, but if you think about it a while, it starts to make sense - the taxes don't vanish, in the end, most of it does end up back in the economy one way or the other. Private profits, on the other hand, very often don't.