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Thursday, May 15, 2003
I've been a bad boy lately, posting on other peoples' comments sections without doing anything on my blog. I've still been writing, you just have to look for it all over the place. Here's one I wrote in response to an article in The Edge of England's Sword.

Kris, speaking as a CPA, nothing would please me more than tax simplification and a general reduction of rates. My area of practice was taxation of investments and investors. Ever try reading the IRS code and regulations dealing with orginal issue discount (sec. 1272) or foreign currency transactions (sec. 988)? It's more scary than anything Stephen King ever wrote.

The underlying assumption in far too many tax arguments is that taxation has legitimate objectives beyond the collection of revenue needed for legitimate government functions. On the left, this leads to tax policies that are alleged to favor the poor by creating income transfers from each according to his ability, to each according to his need. On the right, it leads to such nonsense as "trickle down" and "job creation."

What is wrong with the notion that tax policy should be essentially neutral? That is to say, taxation should be structured so that the decision to spend or invest, hire or buy machinery, work overtime or go fishing, should not be influenced by the tax consequences of the decision? As a good capitalist, would you agree that the butcher and the baker, acting in their own self-interest, would notmake the most sensible decision for themselves? As a libertarian, would you argue that central planning through tax policies that favor or discourage one activity or another of leads to greater economic efficiency?

The insidious nature of tax policy is that not only does the government get to allocate the money it collects and spends, it also influences the spending of the pitiful remainder it leaves in private hands.
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