Conrad Black: Some radical proposals for recessionary times

I propose a self-eliminating wealth tax of 1% for each apparent $10-million of individual net worth, up to a maximum of 5% ($500,000). The taxpayers would be free to devise and direct their own bona fide schemes for poverty reduction, or contribute to existing programs. The tax would decline as consistently defined poverty declined, ultimately to zero. Credits would be given for legitimate declines in taxpayers’ net worth. Such a plan would give the country’s most economically productive and creative people a vested interest in eliminating poverty, and tap into their financial ingenuity.

I also propose that whenever inflation threatens, central bankers try other responses than their default reflex of raising interest rates until they induce a bone-cracking recession under pressure of unaffordable credit. That is, they tend to rain gasoline on to the inflationary fire with a high-pressure hose until the entire economy is scorched.

My suggestion is that governments should arm themselves with standby powers to take less damaging preventive steps. They should be able, when inflation is apprehended, to raise sales taxes on anything except retail groceries, medical supplies (broadly defined) and childrens’ clothing, and to eliminate taxes on any income derived from savings and investment. There would be leeway to fine-tune the tax increases and reductions at any time, and to impose increased interest rates on new borrowings and not existing borrowings, by having a temporary two-tier discount rate. At the least, this would cushion the impact of counter-inflationary measures and reduce the severity of whatever general interest rate increases might be necessary. Economic landings would be softer.