Taxation: Compulsive Failure

Accuracy in Academia ^ | November 2, 2009 | Sarah Carlsruh

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Taxation: Compulsive Failure

Sarah Carlsruh, November 2, 2009

Leslie Carbone spoke on October 15th at Accuracy in Academia’s Author’s Night on her book Slaying Leviathan: The Moral Case for Tax Reform.

Her book, she began, discusses “how the federal government is uncritically, if not compulsively, making things worse through its wealth-spreading fiscal policies.”

Referring to the Constitution, Carbone stated that the main purpose of a government is to ensure peoples’ rights and that progressive taxation—taking a person’s money “simply because they have acquired more than another”—violates those rights. Such policy, she said, is an “affront to justice.”

Her book outlined the “pedigree of fiscal issues as moral issues.”

In other words, it addresses the moral hazards of U.S. tax policies, arguing that U.S. fiscal policy discourages good behavior by taxing it. “It unintentionally steers behavior away from virtue,” said Carbone. As an example of the moral repercussions of taxes, she said that marriage taxes create a financial disincentive to get legally married, thus encouraging cohabitation and even divorce. She told of a couple “who got divorced at the end of every year so that they could claim single status on their taxes, and then got married again the next year and used the money they [saved] to take a vacation…that is the kind of behavior that our tax system encourages.”

The government is aware that taxes affect behavior, claimed Carbone. Taxing a behavior creates a disincentive to engage in such behavior, and, conversely, providing a tax break encourages behavior. The mortgage deductions were intended to encourage home ownership, but at the “cost of encouraging debt,” she said. .....