The complex tax code fosters corruption

Fareed Zakaria argued today on CNN that the complex U.S. tax code is a significant source of legalized corruption. That opinion is shared here and by some experts who have spent years considering this topic, e.g., David Cay Johnston. Both Zakaria and Johnston point out that, among other things, the complexity generates hundreds of billions per year in taxes that are not simply not collected and/or that are pure untaxed loopholes. This is not a trivial problem, as has been argued here before. Zakaria mentioned some tax code fixes, which California Moderates (CM) expresses no opinion on. The point is that the the problem is significant.

Young, massive stars in Messier 82 the "Cigar galaxy" 

Spitzer space telescope image reveals (first time)

the "smoke" around the fires

Maintaining perspective

Although CM opinion is almost always highly critical of the U.S. political status quo and nearly everything it does, that criticism is grounded in at least some awareness of the global context in which America operates. The U.S. competes with ferocious economic competitors who often (usually?) compete under unfair circumstances, e.,g, they subtly cheat on trade agreements, employ unfair tactics and/or generally don't much care about labor or environmental issues.

One of the great advantages the U.S. does have over our competitors is our relative lack of corruption. China, Russia and India are among the most corrupt countries in the world (global corruption map). The U.S. isn't the cleanest but it is near the top. Corruption is one of the key weaknesses or flaws our competitors have to deal with. Corruption harms democracy and economic growth, which is something our competitors seem to know. They either are unable to do much about corruption or have corrupt governments that won't or can't address the issue. That gives the U.S. an advantage that has to be pressed as hard as possible if we want to maintain our standard of living.

One planet, four parents (maybe)

Artist conception of the quadruple-star system HD 98800

(in the nearby [150 light yrs] constellation TW Hydrae)

How to fix it?

To the extent that the U.S. tax code is an ecosystem where corruption can flourish, it hurts the U.S. economy and our democracy. There is a perception that the U.S. tax code is corrupt and that loopholes can be purchased from congress. Congress should fix the problem, but they cannot. Both parties derive too much of their operations and re-election money from special interests who take their payoffs via tax breaks in a complex tax code. That's something that neither the Democratic nor Republican parties will willingly walk away from. The pressure needed for meaningful change has to come from elsewhere.