How higher tax rates can yield lower collections is a good question. It’s one the governments of England, France and even Greece should be asking. We could soon be asking it at home too. In Greece, large tax hikes were imposed as part of the austerity measures demanded by foreign lenders. Yet the Greek Finance Ministry has reported a 16% decrease from a year earlier, a loss of loss of 775 million euros, or $1.05 billion in one month. See Tax Hikes Backfire, Greece’s Revenues Plummet.
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