Read Peter Coy?s latest Bloomberg Businessweek feature article, and you?ll learn about more than just the ongoing debate involving simplification of the federal tax code.
You?ll also learn about the concept of ?tax expenditures,? a term invented by high-tax advocates to support their argument that tax breaks remove money from its rightful owner: government.
To Coy?s credit, he highlights an alternative view:
“To claim that forgone tax revenue is a government expenditure implies that the money at stake actually belongs to the government, which is graciously letting taxpayers keep it, rather than to the people who earned it,” Michael F. Cannon, health policy studies director at the Cato Institute, wrote in a Cato blog last November.
Some tax breaks ought to be scrapped, of course, but not because they rob the government of revenue. Instead these breaks distort the choices individuals would make in the absence of the government?s interference.
This is true at the state level as well, which is why Roy Cordato has argued in favor of a simplified state tax system that maximizes prosperity and minimizes the threat to individual liberty.
