Don’t just do something — stand there:
The grand Keynesian myth is that you can spend money and thereby increase demand. And it’s a myth because Congress does not have a vault of money to distribute in the economy. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. You’re not creating new demand, you’re just transferring it from one group of people to another. If Washington borrows the money from domestic lenders, then investment spending falls, dollar for dollar. If they borrow the money from foreigners, say from China, then net exports drop dollar for dollar, because the balance of payments must adjust. Therefore, again, there is no net increase in aggregate demand. It just means that one group of people has $800 billion less to spend, and the government has $800 billion more to spend.
And for those who say this a prescription for failed Hooverian laissez-faire policies, a) Hoover didn’t keep his hands off the economy — he undertook damaging measures in response to the Wall Street panic (e.g., raising taxes, and implementing protectionist measures) that turned it into a depression that FDR then prolonged and b) a true laissez-faire approach would be to undo the damage that overregulation in the economy has caused.
And here’s a good idea, too:
What about the idea of a moratorium on IRS audits for middle-class taxpayers (using any of Obama’s campaign-trail definitions, from $250K/yr on down) for at least a year? Obviously the IRS is short on auditors, so why not deploy them where they are most needed?”
I’d start with high government officials, since they seem to be poster children for tax evasion, based on Obama’s picks so far. And particularly since those same government officials are so vocal about the need to be (and “patriotism” of) paying your income tax. Maybe if these people had to actually pay the taxes for which they so vociferously shill, they might be a little more sympathetic to calls for rate reduction and simplification.
But probably not. They’re shameless.
[Update a few minutes later]
Victor Davis Hanson rightfully wonders about the implications for the “voluntary” and honor-based nature of the current tax code:
Millions of Americans don’t have either Daschle’s or Geithner’s resources, yet they pay dearly to go to accountants, honestly turn over all their records, and then pay the full amount of taxation in accordance with their understanding of the law, and the advice they receive from professional accountants.
Yet men both much richer and much more informed about the U.S. tax code not only don’t do that, but feel no compunction to rectify mistakes unless they cause embarrassment enough to thwart their careers. Two subtexts as well: there must be many more Daschles and Geithners floating around Washington who don’t show up on the radar unless they want a top political appointment; and, two, the old liberal creed that taxes are good and patriotic and are avoided by greedy, selfish conservative elites seems shattered by these examples.
Any more of these stories and we will be on very dangerous ground, since the message is a terrible one to the American people: You pay your full amount, but our elites not only do not, but won’t unless they get caught.
This is all about as good an argument for a flat tax as one can imagine.
Or getting rid of income tax entirely. Starting with corporate.
[Update a few minutes later]
Driving Mr. Daschle:
“The rumors are… drumroll please… true! You are now driving the next United States Secretary of Heath and Human Services!”
“Congratulations, Mr. Daschle. That sure sounds like quite an accomplishment.”
“Yes sirree bob. Quite an irony, isn’t it, Ernest?”
“How’s that, sir?”
“I mean, well, me, having an African-American as a boss. Well, not that it’s like I’m really your boss or anything. Us being good friends and all.”
“I guess not, sir.”
“But there’s this craziest thing, though.”
“What’s that?”
“Some stupid little tax complication.”
“It’s always something, I guess.”
“You said it, Ernest. Seems that there’s this rule that says that I have to claim these fun little drives of ours as income. Isn’t that crazy?”
“Yes sir, I guess so. That’s why I let H&R Block do mine.”
“I mean, we’re just out here havin’ a good time, Edward and Tom, two buddies out seeing the sights of Washington. So I asked my accountant, how in the world can that be taxable income?”
“No idea, Mr. Daschle.”
“Exactly. Now the accountant says I might be stuck with a $100,000 bill for it.”
“whewww! That’s a lot of money, sir.”
“So, I told that accountant that Ernest can’t help it if Mr. Hindery gives him a lot of free time to goof around with his old friend Tom.”
“If you say so, sir.”
“So, Ernest, I don’t want you to worry about getting into trouble. If you get called by the IRS men to testify, just tell them the truth. About how you really work for Mr. Hindrey, and how these all little joy rides of ours are just us playing hookey.”
“Hookey, sir?”
“Exactly! I’ve already talked to Mr. Hindery about it, and he is ready to forgive you. One other thing, Edward…”
“Ernest.”
“Damn! Sorry again. Out of curiosity, does A-1 Limousine keep records? About mileage and all that?”
“Yes sir. Very complete.”
“Passengers, and time and such?”
“Yes sir, it’s all in the computer. It’s how we get paid.”
“Shit.”
I’m sure it was all perfectly innocent. A mistake any tax/big-government hypocrite lobbyist could make.
[One more update]
It’s hard to see these numbers holding up if this continues. Frankly, I’d rather the sheep were less compliant with this extortion plan, so I actually hope to see the hypocrisy continue. I think that we need a little, or a big, tax revolt, and the behavior of the grandees of the Beltway seems almost calculated to bring one on.