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Taxing either wages or business profits in a slowdown nips recovery in the bud.

That assumes a uniform recession across all industries, and a uniform recycling of all personal income as consumption (or investment). In addition, in a country suffering from trade deficits, there could be import taxes; though those could be problematic for other reasons.

BTW, I forgot to write: beyond more debt, savings and taxes; debt restructuring and temporary capital controls might also work in a mild recession. (And in a heavy one, there is default.)

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Jun 10th, 2010 at 10:22:02 AM EST
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