One of the favorite rhetorical weapons of the Right is to point to the sheer page count of federal legislation, particularly the Federal Tax Code. They are especially fond of pointing out that the tax code is longer than the Bible, though there seems to be considerable haziness on the precise margin. This is often presented as damning evidence of the overgrown power of the federal government, a sprawling, all-consuming monster that has its tentacles in everything. Of course, no one would deny that there is a lot of truth to this picture.
But reading Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens, it occurred to me that another interpretation is possible. Perhaps the sheer length of US tax regulations is more a sign of impotence than omnipotence. Think about it.
In a nation with a strong, respected, generally-accepted authority (perhaps a mere hypothetical), laws ought to be able to be fairly concise. The law can say “Thou shalt not do X,” (where X is a fairly clear and generally-accepted concept), without too much further elaboration, and can generally accept that people will by and large try not to do X. But suppose people feel disinclined to obey; they will start saying, “So what counts as X anyway?” Or, “They won’t be able to convict me of X if I just do it this way…” To cope with this loss of authority, this lack of concern for the spirit of the law, the law will have to become ever more complex and detailed, trying to plug every hole in the dam. We might suggest the principle, “Where words are many, authority is probably absent.” Of course, this becomes a vicious cycle, since the increased regulation simply provides further incentive to try to dodge the law and search for loopholes.
Treasure Islands suggests that this is exactly what has happened with our tax codes. Eager to avoid taxes, companies and wealthy individuals used accounting tricks and offshore tax havens to get off scot-free, and governments responded with ever more complex tax codes to catch the fleeing money, usually with only very short-term success. Even worse are those cases where the complexity and absurd length of the regulations is a result of lobbying, so that governments are not merely struggling to maintain control but have capitulated entirely, allowing corporations to all but write the tax codes for them.
It’s for this reason that, while sympathetic in principle with a dramatically slimmed-down tax code, I have so little patience for the gimmicky proposals that get trotted out every election cycle by the GOP, such as Herman Cain’s absurd “9-9-9” plan. “We can get the tax code down to just a few pages and still bring in just as much revenue!” For how long? A week? The current code started out at just a few pages too, and you can guarantee that as long as multinational corporations and wealthy individuals remain as powerful, mobile, and creative as they now are, that any tax code that wants any slice of their money will have to grow like kudzu just to keep up.