Monday, April 15, 2013

The absurdities of the income tax

The absurdities of the income tax

There is some finite cost to defending the borders, running a court system, and administering “justice.” For those who believe that government should do more (like conservatives and liberals), there is likewise a finite cost for building roads, running healthcare programs and taking care of the poor. That cost doesn’t change significantly overnight or even from year to year.

But the income tax doesn’t reflect this. If productivity and therefore incomes double due to some new technology, the amount of money owed to the government doubles, even though there are less poor people, more private sector “infrastructure” projects and less crime (crime goes up during recessions, down during booms). The more productive Americans are, the bigger and more oppressive a government they get.

Talk about a bad incentive.