Special Reports
We do not think, yet here we are, By Uddin Ifeanyi
What about taxes? Governments slobber at the prospects of the extra revenue that higher tax rates imply. But this increase in the public spending remit is always at a cost. Consumer spending tails of, business investment drops. Except in times of crisis, when increased government spending could jump-start stalling economies, any increase in government spending at the expense of businesses and consumers is nearly always suboptimal (as in, there are more efficient market-based ways to spend the money) and is nearly always supportive of a rise in domestic prices.
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