The market’s self-correction will not be enough, however. Higher taxes will eventually be inevitable, since so many governments have lurched heavily into deficit. But politicians must tread carefully. Tax rises right away would be a rotten idea, since for the moment fiscal stimulus is needed. And even when governments raise the money, they should first get rid of deductions and reverse unmeritocratic measures (such as George Bush’s repeal of America’s death tax) rather than jacking up income-tax rates to punitive levels. Squeeze the rich until the pips squeak, and the juice goes out of the economy.
The market’s self-correction will not be enough, however. Higher taxes will eventually be inevitable, since so many governments have lurched heavily into deficit. But politicians must tread carefully. Tax rises right away would be a rotten idea, since for the moment fiscal stimulus is needed. And even when governments raise the money, they should first get rid of deductions and reverse unmeritocratic measures (such as George Bush’s repeal of America’s death tax) rather than jacking up income-tax rates to punitive levels.
The Economist is an English-language weekly news and international affairs publication owned by "The Economist Newspaper Ltd" and edited in London. It has been in continuous publication since James Wilson established it in September 1843.
In 2005, Deborah Nelson joined forces with military historian Nick Turse to investigate an extraordinary archive: the largest compilation of records on Vietnam-era war crimes ever to surface.
The declassified Army papers were erroneously released and have since been pulled from public circulation.
