A few days ago, Senate Majority Leader Chuck Schumer (D–NY) unveiled his solution for rising prices: higher taxes.
This episode of What’s Ahead lays out why Schumer’s nostrum is the economic equivalent of doctors who centuries ago thought bleeding patients was a great cure for all sorts of ailments. It certainly got rid of the pain and suffering because it got rid of the patients.
Schumer’s scheme would have a similar impact on our wobbly economy today. It would knock down needed investment both by taking money from businesses and consumers and by decreasing after-tax returns. Diminishing rewards for risk-taking leads to stagnation.
Schumer should read up on how the terrible inflation of the 1970s and early 1980s was ultimately conquered: by cutting taxes, resurrecting the value of the dollar, restraining spending and reducing regulations.
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