And it’s not just “breaking the law”-type corruption: high tax rates encourage people and corporations to seek loopholes and special privileges written into the code that the rest of us have no access to. Better to have lower, flatter rates with no incentive to rig the system.
Robert Samuelson, a columnist for the Washington Post, has a very important insight about tax rates and sleaze in Washington.
His column is mostly about Obama’s anti-tax reform agenda, but it includes this very important passage.
…many politicians support tax breaks for favored groups (the elderly, the poor, small business) and causes (homeownership, attending college, “green” industries). This enhances their power. The man who really pronounced the death sentence for the Tax Reform Act of 1986 was Bill Clinton, who increased the top rate to 39.6 percent rather than broadening the base. As the top rate rose, so did the value of generating new tax breaks. Ironically, many of the people who complain the loudest about Washington influence-peddling and…
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