Friday, February 19, 2010

Tax credits and social engineering

There are an ever-growing number of tax credits.  People who get those credits like them, but people who don't get them have to pay more tax in order to provide the credits to the recipients.  It's a clear-cut case of robbing Peter to pay Paul.  You can always count on Paul's support for these benefits.  Everyone has heard of the "Peter principle" but not everyone is familiar with the "Paul principle" but you can rest assured that your congressman is well-versed on the vote-getting benefits of giving Paul these breaks.

The credits along with a lot of other deductions and rules are social engineering efforts to encourage or discourage certain behavior.  Mortgage interest deductions encourage home ownership.  To encourage it even more, those no-income-verification loans with no down payment created a lot of new homeowners, but it also lead to the recession we are still experiencing.

In my opinion the government should concern itself with making taxation fair and uncomplicated and avoid social engineering as part of the tax code.  Ideally the government would operate the way a prudent individual would.  In good times, take in more than you spend an save for a rainy day.  Then if there is a recession, the government could step in to tide us over until the economy improved--without deficit spending and without mortgaging the future of our grandchildren for our debts.


Anonymous said...

Ron Paul doesn't believing in robbing Peter.

taxxcpa said...

Ron Paul is one of the few, or maybe the only one in congress who doesn't support welfare and warfare.