National Post – September 30, 2003
Contrary to a widespread misconception promoted by Princeton economist Paul Krugman and others, supply-siders have academic allies. Take, for example, a recent paper from the International Monetary Fund, An Analysis of the Underground Economy and Its Macroeconomic Consequences. "Our model simulations show that in the absence of budgetary flexibility to adjust expenditures, raising tax rates too high drives firms into the underground economy, thereby reducing the tax base."