MMT, Keynes, and the Tax Puzzle

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In modern economics, the dominant view is skeptical of tax increases during economic downturns. Keynesian economics emphasizes tax cuts and government spending to stimulate demand, while supply-side economics argues that higher taxes discourage work and investment. Modern Monetary Theory (MMT) sees taxation not as a tool for economic stimulus, but for controlling inflation. Adam Smith warned that heavy taxation hinders commerce and was cautious about government intervention. Karl Marx regarded the tax system as part of capitalism’s exploitative structure and believed that tax-based economic measures do not address the root problems.