"According to the study, tax rates that are increased or newly introduced during rearmament phases generally remain in place at least in part even after these phases end. Fully repealing newly introduced taxes is the exception rather than the rule.
As a result, average tax revenues more than a decade after the start of a rearmament phase were still 20 to 30 percent above their original level, while top marginal tax rates were around 15 percentage points higher.
“The current rearmament in NATO countries is among the largest in Western industrialized countries over the past 150 years, comparable to the rearmament phases prior to the World Wars or after the Korean War. A look at history suggests that this will also entail long-term financial burdens for taxpayers,” says Christoph Trebesch, Director of the Research Center International Finance at the Kiel Institute and co-author of the study “Guns and Butter: The Fiscal Consequences of Rearmament and War.”
In wartime, governments have predominantly financed sharply rising military spending through higher public debt. In addition, new taxes are introduced or existing ones increased, for example to finance rising interest payments.
A similar pattern can also be observed in rearmament phases during peacetime, such as periods of geopolitical threat without direct warfare on a country’s own territory, conditions currently faced by many NATO members. While debt issuance and tax increases are smaller in such threat scenarios than in wars, they have nevertheless often led to noticeable changes in tax systems, including higher income or consumption tax rates."
https://www.kielinstitut.de/publications/news/rearming-for-deterrence-and-war-first-debt-then-higher-taxes/
#War #PublicDebt #Taxes #Rearmament #NATO #Warfare #Austerity
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Joseph Lim 
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