As Germany I have experimented with trying to build an economy where I had low taxes and low tarriffs, and partially succeeded.
Basically it starts out with 45% taxes on all classes, and tarriffs set to max. The lower your taxes are, the more your pops will buy from the world market and from my experiments, you will make up for lower taxes, with increses in tarriffs.
This of course assumes you arnt shooting yourself in the foot by building too many factories that produce everyday goods for your pops and thus they dont pay tarrifs on
Once I become industrialized, I lower the taxes gradually over time, to somewhere like 35% with tarrifs set to max. You will find that your population will grow faster as well with lower taxes, since they can buy more of the essential goods due to lower taxes, while keeping your budget up with high tarrifs.
I have been able to build a massive army, navy and have 3 social reforms set to good, and still maintain a healty profit of several hundred a month.
With taxes set to the low 30's and high tariffs I started to see bonds being bought.
I figure that if you are willing to build a nation with no social services, or not a very large army, you can cut your budget down enough to afford lowerign the tarrifs and taxes at the same time. Over the space of say 60 years, with the greatly increased pop growth, and slow growth of state bonds, you can largely recoupe your budget to high profit, and thus build your army up as if you had not gone this route.
This methode however takes most of the game, and thus you spend it building your economy and not stomping all around the world hehe
