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Wednesday, June 12, 2013

The IRS & Tea Bags

As I've noted before, no group should be targeted for special scrutiny by the IRS solely for political beliefs, even groups that basically want to do way with much of our government.  It's simply wrong.  However I think that most folks are missing the real, substantive point underlying all of this: we have a taxation system that is only marginally about gathering revenue to run the government.

Social Engineering.

For decades, both political parties have used the United States Tax Code as a blunt force instrument to sometimes cajole, sometimes basically force people and organizations to act in certain ways.  For the public good, if you will.  The problem though is that by engineering the tax code to change behavior, we've created a system that is exemplified by needless complexity, a propensity for abuse and a disconnect between taxpayers and the government they support.

Good intentions.

Surely, the intentions behind the social engineering of the tax code have been more or less noble.  Who doesn't want to encourage:
  • Home buying (mortage interest credit)?  
  • Saving for retirement (tax deferral of retirement contributions)?
  • Exploration for oil & gas (tax write-off for basically digging a hole)?
  • Having children (dependent tax credit)?
I could go on, but the point is made.  These are good things, but we have to keep in mind not all have been successful and besides, not all exist at the same level of social good.  What's more, they all come at a cost:  most people are incapable of completing their own tax returns and fail to understand a system which they are ultimately responsible for monitoring via the election process.

In my opinion there is no way to "fix" the United States Tax Code.  It's simply beyond repair.  It's been added to, modified, hijacked by special interests and grown into a system that's virtually impossible to manage anyway (just ask the Tea Baggers).  The only real solution is to start from scratch, to create a wholly new system that is based on the underlying need to fund the government, NOT encourage "good" behavior.  

Don't hold your breath waiting though.

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