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Germany's Destructive Tax Increase

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Tags Taxes and Spending

05/21/2006

I have a new article on the recently decided consumption tax (VAT) increase by the German government, where I point out how this will have a negative effect on Germany's already weak economy and that Germany's large budget deficit should be solved by lower spending instead.

Germany should learn from the experience of Japan, whose VAT increase in 1997 sent the economy into a recession, but whose recent deficit reduction through spending cuts have been associated with strong growth.

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