Why not? You can still observe how people behave differently if they have higher or lower taxes.

I guess that's true. But what I meant to say was that in order to arrange for the results to net a zero difference from what the government would collect normally, you're not really randomly assigning tax rates or running a lottery, you're just fixing people's rates at something other than what they would normally be.

Something about manipulating the conditions of the experiment (even a stupid thought experiment) to force a desired outcome doesn't sit right with me.

He means the higher and lower taxes would cancel themself out.

Not that the people in it earn nothing.