The Corner

The Tax Mess (or a Part of It)

A complicated tax system helps the political class make a living (all those exemptions to hand out) and keeps the well-connected in the style they feel they deserve.

 

Here’s a good piece in the New York Times (yes, really…) on the US corporate tax system, a ghastly edifice built on indefensibly high rates and riddled with far too many loopholes.

 

As the NY Times’s writer explains,  

 

“Arguably, the United States now has a corporate tax code that’s the worst of all worlds. The official rate is higher than in almost any other country, which forces companies to devote enormous time and effort to finding loopholes. Yet the government raises less money in corporate taxes than it once did, because of all the loopholes that have been added in recent decades. “

Arguably?

Purists might object, but not all loopholes are bad, of course. It’s fairly easy, for example, to see why companies that lost money in previous years ought to be allowed to subtract those losses from subsequent profits. Many other deductions are, however, much more difficult to defend.

 

Changing the system in a way that lowered rates and reduced the number of loopholes makes a great deal of sense, not least for the reasons set out in the article (read the whole thing), and it might even generate a bit of extra money alongside a lot of extra efficiency.  In addition, it would give politicians less to sell and lobbyists less to buy.

 

In short, it would be just the sort of thing to brighten up a Tea Party or two.

 

Over to you, Congress.

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