I recently heard an AM radio talk show host ranting about how one political party wants to raise taxes and how terrible it would be, amid fears of a recession, to “take all that money out of the economy.”Indeed, in some circles, it seems an accepted, immutable fact that taxes “take money out of the economy.” But do they? Taxes take money out of people’s pockets — yes. More taxes mean families have fewer choices about what to do with the money they earn — true enough.But do taxes “take money out of the economy”? They most certainly do not.
