Saturday, January 23, 2016
John Cochrane, the Grumpy Economist, in a recent thoughtful essay posits: "The first goal of taxation is to raise needed government revenue with minimum economic damage."
I wish it were so, but from the cheap seats it looks like Congress has purposely lost sight of the first goal. They discovered a long time ago the joys of societal engineering through tax treatment. Want some particular outcome? A tax credit here, a deduction there, and, before you know it, magical things happen. More recently they discovered that vast riches in campaign contributions are available to those willing to tinker around the edges of the Code. A few obscure sentences slipped into some obscure legislation and suddenly some nameless entity reaps a financial windfall via the tax code. Complexity has become their friend and their drug. It is wishful thinking to believe that Congress will surrender it willingly. Just saying.