I think that buying tech should be done sometime when you get around 10k from taxes, so you can buy 0.5 tech but still build up infrastructure.
As for improvements, they are available only when you have at least 1000 citizens. Once you reach this number try to save up a part of daily income and buy some useful improvements. I like harbor the most as it gives you 1 extra trading slot, but it costs 200k so I would buy something to boost up citizen income first.

ADDITION:
QUOTE(Deathawk @ Nov 3 2006, 10:41 PM)
Sorry DEAD, that's wrong, as it's situational with your nation. Your nation makes more money when it's happy, so there is a happy medium and I'm pretty sure it's not 28%
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Don't say it's wrong before you've tested it. Change the tax % to the braking points(16, 20, 23, 25, 28) and see which one gives you higher "Avg. Individual Income Taxes Paid Per Day". You'll see.