The Money Will Come From Somewhere

Republicans don't want to slit their own throats before the election by identifying what taxes they will raise to run the government and reduce the deficit.  They probably don't want to slit their throats (or have them slit for them by Grover Norquist) after the election, either. 

If the Republicans win the White House and both houses of Congress you can expect to see a two pronged approach.  Republicans will need to contort the tax system to avoid the appearance of raising tax rates, while at the same time increasing revenues through other gimmicks:

1.  Republicans will not increase tax rates per se.  They will reduce tax deductions.  This will have the same effect, increasing net revenue.  But those Republicans who signed Grover Norquist's pledge will be able to take cover behind level tax rates.  Reducing deductions will require massive changes to the tax code.  The Congress doesn't just rip old statutes out of the old tax code.  It writes new code to explain what has expired and what new statutes take the place of the old.  The code will explode with new definitions and procedures.  The mushrooming tax code will magnify complexity and confusion for tax payers and collectors alike.

2.  The Republicans will likely avail themselves of what has become a growing trend.  Penalties!  They will increase penalties and interest charges levied against taxpayers who are caught up in the new tax code complexities (See #1).  The complexity of the new and improved tax code will cause confusion and thereby enhance the opportunities to levy penalties.  Raising penalties, not taxes, will theoretically avoid the wrath of Americans for Tax Reform President, Grover Norquist. 

It appears to us, Citizens for Tax Complexity (CTC), that the Republicans have come up with a plan to have their cake and eat it too.  They won't raise taxes.  They will raise revenues in the forms of additional penalties and interest.  They will accomplish this with increased tax code complexity.  This bodes well for all of the bureaucrats, politicians, tax lawyers and accountants who we strive to represent.  It feels good to be on the winning side.

Thank you for your attention.

Citizens for Tax Complexity

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