Congress’ monopoly on taxing individuals
November 6, 2017
Being a recovering tax lawyer, people ask me what I think of the Republican tax proposals. Here's what I tell them.
The proposed business changes are welcome and positive. They'll make our business sectors more productive and competitive. That will help boost employment and employee earnings. Everyone will benefit.
But the proposed individual changes are like moving the deck chairs around on the Titanic. Some folks will keep a little more and others will pay more. Some interest groups will celebrate while others are PO'd. The government will walk away with the same portion of people's hard earned money with no material effect.
Why are the business proposals better than the individual proposals? Because Congress has a monopoly on taxing people but not on taxing businesses.
The individual proposals are driven purely by domestic politics. One interest group pitted against another, canceling out each other in the eyes of politicians as a group. In the end, Congress gets its collective pound of flesh from the people and the people can't prevent it. People can't choose an alternative tax system.
But our business sectors don't have to put up with Congress' monopoly. They've moved capital and jobs overseas into sweeter tax environments. The competition from foreign tax systems has forced even our usually myopic politicians to offer a better deal at home.
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Would hope that the people had a choice too.
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