28 March 2008

Deadweight loss of taxation

Argentina is doing their bit to help economics instructors explain the deadweight loss of taxation. After the Argentinian Government increased export taxes on agricultural exports:
The tax rise would lead to some 2m hectares (5m acres) being left idle next year, reckons Pablo Adreani, an agricultural consultant. Some producers are already cutting back: Alexis de Noailles, who runs Rincón de Chillar, a large farming company, says the new policy caused him to stop work on a new milk factory, costing ten families their jobs.
From the Economist

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