Washington, DC is currently in the middle of a the “tax reform” process, which as Jeff Deist, points out, is ” a con, and a shell game.” Tax reform proposals, Deist continues “always evade and obscure the real issue, which is the total cost – financial, compliance, and human – taxes impose on society.”
Tax reform is really about which interest groups can modify the current tax code to better suit their own parochial interests. The end result is not a lessened tax burden overall, and thus does nothing to boost real savings, real wealth creation, or real economic growth. It’s just yet another government method of rewarding powerful groups while punishing the less powerful ones.
Not surprisingly then, the news that’s coming out of Washington about tax reform demonstrates that the reforms we’re seeing are only shifting around the tax burden without actually lessening it. The central scam at the heart of the matter is that DC politicians are more or less devoted to “revenue neutral” tax reforms. That means if one group sees a tax cut, then another group will lose a deduction, or even see an actual increase in tax rates.
This is why many middle class families may be looking at a higher tax bill. David Stockman explains:
[O]n the eve of the House Ways and Means committee vote on the tax bill—-which will then be barricaded by a no amendments “closed rule” when it goes to the full house—–the smoking gun is already apparent. By 2027 (after the temporary $300 adult tax credit gimmick expires and all provisions of the Brady mark become fully effective), the middle quintile US family ( about 30 million filers between $55,000 and $93,000 of AGI) would find itself in a crap shoot.
This post was published at Ludwig von Mises Institute on November 13, 2017.