Carrot vs Stick
- Jayna Whitt
- Apr 19
- 1 min read
Updated: May 5
Tax policy should strategically use both
tax exemption or deduction is a carrot
tax imposition is a stick
Which do you prefer?
Taxes and tax deductions are extremely powerful, just as tariffs. They change behaviors. The government wanted us to buy houses, and therefore, our mortgage interest is not taxed unless it exceeds the maximums.
Inbound taxes/tariffs can be used to reduce outbound taxes/tariffs or to raise revenue.
Do we have the most powerful consumer market? Yes
Do we react to punishment well? No
Do we react to carrots? Absolutely.
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