Taxes are less about money than you think

Reuters reported yesterday that a bill about to be considered would raise taxes on investment fund managers, by treating some of their investment income like "regular" income. Will this raise a lot more money in the grand scheme of things? No. Why do it? Politics. It's a way to look "tough on" Wall Street. This week the unpopular people are the investment fund managers, so we are going to tax them extra, and not let them eat lunch at the cool kids' table. One of the reasons our tax system is so insanely complex is that it's not designed to be about raising needed money, it's not particularly "designed" at all in the sense that there's some overreaching vision that has created a coherent system. The tax system is our legislature's favorite plaything. They take away money from whomever isn't cool this week, and give it to whomever is. Meanwhile, in their great concern that we all be a little cooler, they tax ugly shoes (or whatever else they deem uncool) a little extra and provide tax credits for funky wallpaper (or whatever they think is cool). Since, like ditzy teenage mallrats, congress can't be bothered to think for a…

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