 From the Ludwig von Mises Institute, this is the Mises Report, a public policy and economic issues commentary series. In this program we present another part of 10 great economic myths. The material heard today was prepared by Murray and Rothbard, Ph.D. of New York Polytechnic Institute for the Mises Institute. Tax increases are a cure for deficits. Those people who are properly worried about the deficit unfortunately offer an unacceptable solution. Increasing taxes. Curing deficits by raising taxes is equivalent to curing someone's bronchitis by shooting him. The cure is far worse than the disease. For one reason, as many critics have pointed out, raising taxes simply gives the government more money, and so the politicians and bureaucrats are likely to react by raising expenditures still further. Parkinson said it all in his famous law, expenditures rise to meet income. If the government is willing to have, say, a 20% deficit, it will handle high revenues by raising spending still more to maintain the same proportion of deficit. But even apart from this shrewd judgment in political psychology, why should anyone believe that a tax is better than a higher price? It is true that inflation is a form of taxation in which the government and other early receivers of new money are able to expropriate the members of the public whose income rises later in the process of inflation. But at least with inflation, people are still reaping some of the benefits of exchange. If bread rises to $10 a loaf, this is unfortunate, but at least you can still eat the bread. But if taxes go up, your money is expropriated for the benefit of politicians and bureaucrats, and you're left with no service or benefit. The only result is that the producer's money is confiscated for the benefit of a bureaucracy that adds insult to injury by using part of that confiscated money to push the public around. No, the only sound cure for deficits is a simple but virtually unmentioned one. Cut the federal budget. How and where? Anywhere and everywhere. You've been listening to the Mises Report from the Ludwig von Mises Institute. Funds for this series come from the Friends of the Ludwig von Mises Institute, a non-profit educational foundation. Address your comments and inquiries to the Mises Institute, Thatch Hall, Auburn University, Auburn, Alabama, 36849.