A cheerful post just in time for the holidays!
Such preferences nevertheless remain highly popular, since their benefits are more obvious and immediate than the benefits of lower rates. “The dirty little secret is that the largest special interests are us—the vast majority of U.S. taxpayers,” Olson writes. “We cannot pretend that broadening the tax base means eliminating someone else’s tax break while preserving our own.”
Here is another pretense that stands in the way of a simpler, fairer, more efficient tax code: the idea that politicians can improve our decisions by using tax preferences to encourage officially approved behavior, whether it’s giving to charity, going to college, adopting children, investing in research, converting corn into fuel, or buying a house, a hybrid car, or a health insurance policy. It’s bad enough that the government forcibly extracts a share of our income; it should not presume to direct the spending of the rest.