There is a popular story about Agastya rishi visiting demon brothers Ilvala and Vatapi, where Ilvala deceived him into eating Vatapi with the intent of reviving his brother and killing the great sage in the process. The digestive power of the great rishi was so strong that he digested Vatapi before Ilvala could call him out. 

Very few people know the background of this story though. Why did the great rishi visit the demon brothers in the first place? 

Rishi Agastya's wife Lopamudra was a princess, who demanded royal luxuries from her husband. In order to fulfill the wishes of his wife the rishi went to three different Kings. All the three kings told the great rishi that they only have enough wealth that is required to run the kingdom efficiently and showed them their books. The rishi concluded that sharing any part of their wealth with him would mean the kings will have to unfairly tax the people thus increasing the burden on common folks. That is when the kings tell the rishi about the demon brothers who had been looting merchants and killing them. They had amassed a lot of unfair wealth. 

The message here is that the kings taxed their population only as much as was required to run the kingdom, not more. 

In Shanti Parva, when Yudhishthira went to meet Pitamaha Bhishma to learn lessons about statecraft from the experienced statesman, he also touched upon the topic of taxation. In that conversation Bhishma said that a wise king should collect less than one sixth of their income as tax. Apart from this additional income can be gathered by imposing fines on criminals. 

Pitamaha also warned Yudhishthira against unfair taxation.

Unfair taxation leads to people resorting to unfair means to hide their income and avoid paying taxes. This situation is avoidable for a king because a king also gets one fourth of all the deeds (Papa and Punya) performed by the subject. A king must ensure his subject is not indulging in Papa-karma.