Iran Closes Shop

Iran's President Mahmoud Ahmadinejad may have hoped to close his yawning deficit—and advance other goals—with a big tax increase on the merchants and shopkeepers in the country's bazaars. But the bazaaris declared a strike for only the second time since they helped bring down the shah in 1979. (The first time was in 2008, when Ahmadinejad made another attempt to raise their taxes.) Within three days the tax boost dropped from 70 percent to 15 percent.

Someone must have told the government to back off—and "someone" would be Ahmadinejad's patron, Ayatollah Ali Khamenei. His fellow religious leaders rely on devout Shia bazaaris who give one fifth of their disposable income to the clergy. It was the merchants and shopkeepers who funded Ayatollah Ruhollah Khomeini's triumphant return from exile. Now the bazaaris are convinced that Ahmadinejad and his pals in the Revolutionary Guard Corps want to take over their business. The ayatollahs are worried that their source of funding will be cut. That's the last thing the Supreme Leader wants; he's been fending off a clerical revolt ever since Ahmadinejad's disputed reelection a year ago.

Iran Closes Shop | World