Man Without Qualities

Tuesday, November 19, 2002

FURTHER UPDATE: The Piper Bills Germany

The Wall Street Journal Europe has an excellent editorial calmly analyzing the cutting edge of Germany's current efforts to underme its own economy. Example:

Mr. Schroeder is going after one of the few havens of relative tax-freedom in tax-heavy Germany -- long-term capital gains. Monday's proposal would tax, at a 7.5% effective rate starting in February, the gains from sales of securities held for more than a year and property held more than 10 years. No one in Germany thinks this will stimulate the economy. But the government says it needs the money, so it's taking it any way it can. Apparently the idea that it's precisely in tough economic times that Germany's citizens can least afford new taxes was not much of a consideration.

Have economists studied whether it's possible to ski down a Laffer curve? Germany seems poised to find out.

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