Letter: Raising taxes won't solve woes
Greece's finance Minister Evangelos Venizelos, addresses lawmakers as Prime Minister Lucas Papademos looks on during a debate at the Parliament. (Feb. 12, 2012) Credit: AP
In "What we have in common with the Greeks" [Opinion, Feb. 27], columnist Daniel Akst's reasoning seems to run like this: The Greek and Italian economies are bankrupt. Both countries have higher levels of taxation than we do. If we want to avoid becoming like them, the answer is to raise our taxes.
Despite his self-evidently faulty logic, Akst doesn't totally miss the relationship between levels of taxation and economic behavior. He correctly sees the connection between higher tax rates and more tax evasion. But if he really decides to be a student of former federal budget director David Stockman, he will discover how the Reagan administration shepherded our economy out of a recession worse than this one, and created an economic boom, by giving the private sector incentives to invest and produce by lowering marginal tax rates.
If Akst wants to go further back, he can see how the Kennedy administration did the same thing, lowering marginal rates in the 1960s. Until the Obama administration recognizes the relationships between fair and predictable tax policy, private sector incentives and economic prosperity, the best we can expect is a moribund economy, higher taxes, high unemployment, and more income-redistribution legislation, ironically called "jobs bills."
Jim Van Schaick, Baldwin
