Thursday, August 22, 2013

The Devil Is in the Taxes

My foolproof plan will rescue our society from the sleazy grasp of special-interest politics.

While pretty much everybody agrees that the U.S. tax code is a mess, nobody does anything about it. Oh, politicians talk about doing something, but mainly what they do is make it worse.
There’s a reason for this. You. You’re the reason.

People, alas, tend to be greedy and selfish and their attitude toward taxation is expressed in the old rhyme: “Don’t tax you. Don’t tax me. Tax that fellow behind the tree.”‘

This is as true of liberals as it is of conservatives. We all tend to like those tax provisions that benefit us and hate those that benefit someone else.

We and the organizations we work for hire lobbyists to ensure that our narrow economic interests are served and they do a terrific job. Give the devil his due — lobbyists are very good at what they do.

And what they do, specifically, is lie, cheat, steal, bribe “educate,” and otherwise persuade legislators to give their clients tax breaks. They descend on the nation’s capital like a mighty swarm of locusts. 

When they’re done, the tax code is a ragged collection of holes but a hundred or so pages longer. And 80 percent of Congress is assured of re-election. It’s called democracy.

Just try and cut out a tax break someday, I dare you. I don’t care if it’s for bee keepers, skateboard manufacturers, buffalo hunters or buggy whip makers. Every industry and interest group has its own personal lobbyist working to bury a stealth tax break in an obscure bill.

Many reformers have long since despaired of breaking the stranglehold of these “special interests” on our government.

I have not. I have a foolproof tax reform plan that will rescue our society from the sleazy grasp of special-interest politics and set us on the path of justice and righteousness. Here’s my plan.
Eliminate the corporate income tax. Don’t cut it. Get rid of it.

In the first place it’s a tax on success. Corporations that are well-run and make money have to pay it (theoretically, at least). Corporations that are losers don’t. That’s not the American way. Let the good and bad corporations compete on a level playing field.

In the second place, and more importantly, it’s an almost irresistible invitation to cheat or, at the very least, evade taxes through shady practices, like setting up dummy companies in far-away and low-tax places. (I’m looking at you, Apple.)

Corporations wouldn’t have to cheat on their taxes under my plan because there’d be no taxes. Tax shelters? Gone. Neither would there be deductible expenses.

Travel expenses, entertainment expenses, advertising expenses, investment expenses, they’d all be simply part of the cost of doing business. No more expensive skyboxes rented by corporations at stadiums — unless the executives thought it was actually worth the money on a dollar-for-dollar basis.

No more “business lunches” at fancy restaurants or country club memberships for executives at company expense. Whatever was spent to make money would be money taken out of profits.
I know what you’re going to say: “Where are you going to get the money to run the government?”

From people — people like you, actually. We would all be taxed at a progressive rate high enough to fund the government we need. Capital gains would be taxed as ordinary income, as would everything else.

Our bloated entertainment economy would shrink. Our dishonest, subsidized corporations would learn to stand on their own two legs. And a great many lobbyists and crooked tax lawyers would be forced to find honest employment.

Don’t worry about any of this happening. The chances of my plan or anything like it being enacted are less than yours of winning the Powerball lottery jackpot. You’re more likely to be struck by a meteor.

People hate taxes but they love deductions.

Nor do our legislators want lobbyists to disappear. Without lobbyists to give them money, how would they get elected? By finding real solutions to real problems?

That’ll be the day.


OtherWords columnist Donald Kaul lives in Ann Arbor, Michigan. OtherWords.org