Who Should Pay for this Mistake?
6 December 2007
Editor, USA Today
To the Editor:
Rep. Eric Cantor is correct that raising taxes on private equity firms is neither necessary nor appropriate for fixing the alternative minimum tax ("Opposing view: Don't hike partnership taxes," December 6). The reason, however, is more fundamental than the fact that such firms benefit ordinary Americans.
Not indexed for inflation, the AMT was never meant to tax the millions of Americans that it will now tax if Congress doesn't fix it. In other words, taxing people in this way is a mistake. What ethical argument justifies Congress shifting the costs of its mistake onto others? If Jones mistakenly budgeted to spend dollars that he wrongly thought would come to him from Smith, is Jones entitled then to take this amount of dollars from Williams in order to "pay for" correcting his error?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, USA Today
To the Editor:
Rep. Eric Cantor is correct that raising taxes on private equity firms is neither necessary nor appropriate for fixing the alternative minimum tax ("Opposing view: Don't hike partnership taxes," December 6). The reason, however, is more fundamental than the fact that such firms benefit ordinary Americans.
Not indexed for inflation, the AMT was never meant to tax the millions of Americans that it will now tax if Congress doesn't fix it. In other words, taxing people in this way is a mistake. What ethical argument justifies Congress shifting the costs of its mistake onto others? If Jones mistakenly budgeted to spend dollars that he wrongly thought would come to him from Smith, is Jones entitled then to take this amount of dollars from Williams in order to "pay for" correcting his error?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday May 15, 2008 at 12:15pm