Social Engineering with the Tax Code

Senators Max Baucus (D, MT) and Orrin Hatch (R, UT), Senate Finance Committee Chairman and Ranking Republican, respectively, had a thought, as described in a recent Wall Street Journal op-ed.  In a letter to their fellow Committee members, they suggested,

To make sure that we clear out all the unproductive provisions we plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives.

In other words, they want to zero out all deductions, loopholes, subsidies, credits, carve-outs, and so on in the Federal tax code and start over, including only those that are explicitly defended and defended successfully.

Right idea; flawed execution.  Items 2) and 3) are mutually exclusive.  “Important policy objectives” can only come at the expense of this or that group.

Moreover, “policy objectives” through taxing is inherently ineffective and immoral.  If Congress can’t achieve the policy objective through legislation, it’s because the legislators and their bosses, the sovereign people, don’t want that objective, and so that objective is illegitimate.

Further, the circumscription created on this or that group by taxing for that or this objective limits arbitrarily the victimized groups, and it thereby immorally eliminates those groups’ equality of opportunity—which is supposed to be equal to the opportunities of other groups (vis., the opportunities of the tax-favored groups)—and their ability to exercise such opportunities as are left to them according to their own imperatives, not those dictated by government.

We’ll see how far even this idea gets, though, first in the Progressive-controlled Senate Finance Committee, and then in the Progressive-controlled Senate.

On the other hand, what’s happening along these lines in the Republican- (as opposed to Conservative-) controlled House?  Not much, mostly this year-old chit-chat.  Even on the matter of social engineering through the tax code, the Ways and Means letter and attachment merely identify the existence of damage done by social engineering, but they do not offer anything concrete to do about that damage or about the measures themselves.  At least the two Senators had that much.

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