The Invisible Hand #5 – Tax Law

My 81-year-old father and I speak every Sunday. He called me today, as usual. He asked me how I was. I replied that I was relaxing in my recliner, studying tax law. He then said, “Gee, you are gonna have to find something more complicated to study next time,” with tongue firmly planted in cheek.

“Tax law is complicated,” he explained, “because everyone elected to national office claims that they are going to modify the law to suit a certain group of people who might vote for him.” I agree. I have also learned that the tax code is so infernally complicated because everyone who pays taxes and can hire a lawyer to minimize their bill creates a new precedent.

I argue for a flat tax, not because I think it is fair, but because I would rather not study tax law to improve my earning capacity. Tax policies work best for society when they are “progressive.” Not as people commonly understand the term, but rather that people who have earned more because of the infrastructure our parents and grandparents created by paying their fair share should pay more to keep it going.

Progressive taxation is insurance for the future of our children and grandchildren. A fair flat tax would offer a lower rate to lower earners so that they can support themselves and their loved ones with more comfort. Higher earners would pay more because they benefited from the schools, roads and health care that made it possible for them to use their talents and education, and hire educated workers who missed fewer days of work due to illness or difficulty commuting.

How will a few extra bucks in your pocket make up for the dreadful state of our infrastructure? What kind of world are we leaving to our children? What example do we set for them when we live our lives mainly trying to figure out how to cheat the government?

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