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‘Taxes are a fraud!’

P. J. O'Rourke Apr 5, 2012

Taxes are a fraud! I’m not speaking as a Tea Partier or an Occupy Wherever, 99 percenter. I’m speaking as an ordinary taxpayer with a 1040 form, a bill from my accountant, and a headache.

In theory, taxes should be like shopping. What I buy is government services. What I pay are my taxes. I’m not worried about whether taxes are too high or too low or whether government services are worth it or not. That can be settled in the voting booth.

I’m worried about the shopping itself. It’s supposed to be a simple transaction. There’s a thing to buy and a price to pay. I pay the price and I get the thing.

But the relationship between government services and taxes isn’t so simple.

According to the Government Printing Office, the menu of government services as listed in this year’s federal budget is 2,403 pages long, and the U.S. Tax Code is 16,845 pages!

I’m left with no idea what I’ve got in my shopping bag and not a clue about what’s going on at the cash register.

Which bring us to an often-neglected principle of economics: “Complexity is fraud.” If we can’t make heads or tails of what we’re buying, how can we be sure what we’re actually getting?

We saw it writ large in the 2008 financial crisis. Sub-prime mortgage based collateralized debt obligations and all sorts of other exotic derivatives were being bought and sold. We can argue, however lamely, that these products were not meant to cheat the public. But because of their complexity, that was the result.

And this kind of convoultion is all around us: Consider byzantine airfare pricing, bewildering cell phone service packages, the impenetrable math of figuring out whether it’s cheaper to lease a car or buy one.

Nobody seems to understand what he or she is buying or selling anymore.

And nothing is harder to understand than what the government is selling us with the federal budget — except how we’re buying it with the federal tax code.

I’d complain to my congressman. But I think he wrote part of the damn thing.

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