While some taxes are worse than others, there is no good tax. All taxes distort production, depress economic growth, and punish producers and consumers. It’s also true that different kinds of taxes affect production and punish people in different ways.
The work of Adam Smith was truly epoch-making in the development of economic thought. In his An Inquiry into the Nature and Causes of the Wealth of Nations, which appeared in 1776, he explained the law of supply and demand:
As the nation’s equity markets crumbled, the question that inevitably arose was “When will stock prices stop falling?” And there was always some willing economist, journalist, politician, or other self-appointed pundit ready to take the bait.
Back when I was an undergrad, I got an A in Economics 101, and a formal request for me to major in economics. The course was both easy and straightforward, and I was under the impression that a solid knowledge of how the economy worked was soon to be in my grasp.
Widespread panic set in this summer when the party of King Simeon II won a majority in Bulgaria’s recent elections. There were ominous warnings about this being the first East European state to take a step toward restoring monarchical figures to power. So many people associate democracy with freedom and monarchy with tyranny that any attempt to revisit pre-democratic systems of government is regarded as evil.
