Why High Taxes Are Counterproductive

Why High Taxes Are Counterproductive
Argentine President Mauricio Macri at the Casa Rosada presidential palace in Buenos Aires on January 17, 2017. After years of socialist mismanagement, his government has to decrease Argentina's tax burden to make the country competitive again. EITAN ABRAMOVICH/AFP/Getty Images
Daniel Lacalle
Updated:

In Argentina and many other countries, governments suffer from a chronic shortage of money to spend. In other words, revenues are insufficient and expenditures too high.

But what does “insufficient” mean? In the case of Argentina, its fiscal deficit problem has not been generated by a low tax burden, but by a confiscatory and excessive one.

Daniel Lacalle
Daniel Lacalle
Author
Daniel Lacalle, Ph.D., is chief economist at hedge fund Tressis and author of the bestselling books “Freedom or Equality” (2020), “Escape from the Central Bank Trap” (2017), “The Energy World Is Flat”​ (2015), and “Life in the Financial Markets.”
Related Topics