Levy a Broad Tax Increase. A distressed government likely has
not earned the trust of its citizens. Large tax increases may
further alienate citizens, reducing their support for
government, at best, and prompting a tax revolt at worst.
Rather, governments should concentrate on maximizing efficiency
and focusing on priority services.      • While a broad tax
increase is fair – everyone pays – it may not be in the best
long-term interest of government. It could reduce citizen
support for government, hurt economic competitiveness, and
remove pressure for needed reform. It is essential to carefully
evaluate all legal and economic implications of a proposed tax
increase. There may be limitations on the government’s capacity
as well as limitations on overlapping rates that cause conflict.
Further, a tax increase may cause negative results on
collections if there are large taxpayers adversely affected.
Perceptions of inequity or misfeasance may also trigger
expensive and extended legal battles.   • A tax increase sh