Tax breaks and subsidies are intended to drive people towards financial decisions that work in the best interest of the economy.
Isn’t capitalism supposed to be able to do that on it’s own? Apparently not.
America’s tax code is so complex that few tax payers are willing to submit their returns unaided.
Not only is it costly for the tax payer, it’s also costly for the government. The breaks and subsidies cost $1.1 trillion according to a recent estimate.
There is no question that some of the tax breaks work. However, the majority are the result of successful lobbying to the benefit of specific interest groups.
So which ones to get rid of?
Let’s start with all of them. Specify a time-frame, say nine months, for the interested citizens to motivate why the breaks and/or subsidies should be reinstated. On D-day, those subsidies and breaks without a reprieve stop.
Who gets priority in the decision making? Affordability should determine that. Businesses that would go broke; businesses that have invested huge amounts of money, and would lose that money; the poor.
That should get rid of quite a few like the ethanol subsidy. It only took 33 years to get rid of that one.
Parts of this idea have already been raised in the run-up to the presidential election. They have not got much attention. That’s a pity.
The high price of tax breaks Not so easy
Taking from the 19%, giving to the 1% Mitt’s maths
Charity and taxation Sweetened charity
Barack Obama and the economy The choice
Visas for entrepreneurs Where creators are welcome