Monday, August 22, 2011

Good Taxes and Bad Taxes

Congress is considering increasing payroll taxes.

Congress is also considering cutting gasoline taxes.

The net effect is that we would tax work and employment more, while taxing congestion and pollution less.

This is the opposite of what most economists recommend. Arthur Pigou showed that we should tax things we want to reduce, not things we want to increase. What's more, increasing taxes on employment in the midst of the biggest slump since the 1930s is especially foolish.

Perhaps if enough citizens contact Congress, they will do the right thing.

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