One of the foundational problems with bureaucracies is their insistence on fighting corruption by complicating everything they touch. Someone in a company cheats on a travel reimbursement, so everyone must fill out multiple travel forms and submit duplicate receipts. Management and unions won’t stop fighting, so everyone must take a 15.8-minute coffee break and can only make so much money with overtime, if… Reg.123.89H allows it.
It is all backwards. The logical way to fight corruption is by simplification.
Does this apply to corruption in Washington? It does indeed.
Let’s use the IRS as our example. The income tax laws are an expensive and time-consuming mess. It costs Americans billions of dollars yearly just to prepare the tax forms. Why can’t we get reasonable tax laws from the feds?
There are several factors that conspire against any significant change.
1) How could a federal politician protect their friends, and gain influence with a simple tax law? They couldn’t. Keep in mind that no matter how rich a politician was before going to DC, they are almost all multimillionaires after they leave. That wasn’t done by magic.
The more complicated the tax code, the more money they have to spend to keep themselves in office, support their friends, and buy influence.
How could federal bureaucrats and politicians maintain power and influence if they had less money and had to justify the money they had? The federal government refuses to cut its budget. The budget can never be cut back; it always has to grow. Even staying the same is seen as an emergency.
To paraphrase another writer, asking a politician to simplify taxes is like asking him or her to sneak up on themselves and steal their own wallet.
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2) Many voters don’t demand simplification for a variety of reasons.
They can’t rationally deal with numbers, or they simply don’t want to take the time and effort to think about it. They have lived in a world where problems are solved by making things more complicated.
So, they are not surprised when the tax codes are never simplified.
To them, it is just the way things are.
3) Many don’t demand simplification because they have been taught since childhood that the government is sacrosanct and knows what’s best. We are told that people who want to pay less taxes are selfish, and “rich” people should be paying more. The rich should pay their “fair share.” Note that this term is never defined. A simplified code would make taxes obvious to everyone, which does not benefit a politician seeking to find support from the masses by creating evil enemies.
4) We are constantly bombarded with the doctrine of Santa Claus economics, which is the economics of magic. The far left is actually insulted by the fact that governmental programs and giveaways need to be paid for.
It is very odd, but according to Santa Claus economics, the more people know about money, the more irrationally they spend it. The far left’s image of a rich person is like some cartoon, much like Scrooge McDuck. Evidently, the evil people who own and run businesses should step up and look for ways to pay more taxes. They should never desire to cut back their tax burden, like everyone else.
Simplification would expose the real world. For example, businesses do not pay taxes. Let me repeat that. Businesses do NOT pay taxes.
Business taxes are paid by customers, lower pay for workers, employees being laid off, and/or closing up in bankruptcy. That’s it. Business taxes are a way of hiding what is actually a sales tax and a rather nasty tax on employment.
Complicity does nothing to make Washington less corrupt, but it does make you, me and the state and local governments poorer.
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Dennis Clayson is a business professor at the University of Northern Iowa. The opinions expressed in this article are those of the author, and do not reflect those of the University of Northern Iowa.