Is this really a good strategy? I ask in all seriousness because I am always afraid that I am hurting my economy if my tax rate is so low that I get -200 or so BC early in the game just to do this.
I guess it depends on your definition of "early game."
Every game I play, I will start by adjusting my tax rate every turn to just maintain 100% approval on my home world until it's population approaches the maximum. With such a small population, even a tax rate of 100% would not be bringing in many BC's. And the difference between a tax rate of 59% and say 29% is not large.
By concentrating on moral, economy, and population growth, I ensure that I can raise taxes on some turns (moral), that whatever my tax rate, I'll see more income (economy), and see even more income because my population is growing quickly. And don't forget your sensors so you can get some more survey vessels!! I can't emphasize this last point enough. Use them to not only find anomalies, but to scope out resources and big, juicy planets.
Once I reach the max population on my home world, I'll start adjusting my tax rate to whatever works. This usually winds up at 49% for much of the game, which with my typical racial picks and a strong desire to keep my throngs of loyal subjects happy and loyal, puts my approval rating somewhere between 75% and 100%.