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Such a tax change also causes a sharp reduction in the number of people who work at all, and causes many others to join the underground economy (see Chapter 2 ), or to devote their time to tax evasion. Overall, then, higher tax rates cause lower output and higher unemployment. Wealth is reduced now and in the future. Read More →

We have seen in the previous chapters that secure property rights and the rule of law are crucial in fostering economic growth. These institutions help ensure that individuals are secure in the knowledge that they will get to keep the fruits of their labor. Read More →