Tuesday 19 April 2016

Batman vs IRS

file under:amateurish economics

The news is still filled with stories of people avoiding their taxes. What almost everybody seems to have forgotten is that tax avoidance is good and proper, unlike evasion.

Tax evasion is where you lie to the authorities and don't pay the taxes that you legally owe. Think about Batman and Wayne Industries. The Research and Development division produces armoured vehicles, body armour, wing suits, surveillance systems and so forth and then Bruce takes them home and uses them for his personal (crime fighting) life. In reality he should be a paying customer, there would be tax on the sales, and the materials and labour wouldn't be tax-deductible because they're not really prototypes.

Our tax code is based on avoidance. Tax breaks to invest in new equipment for your business, disincentives to waste energy and pollute. Tax on tobacco and alcohol, no tax on children's clothes or individual savings, no tax on most food but tax on chocolate biscuits and (soon) fizzy drinks. When you hear the press, politicians and idiots bemoaning tax avoidance remember that they are arguing for you to buy clothes for yourself before your children, to forgo fruit for biscuits, and to start smoking and drink away your savings.

They've set up the tax rules badly and now they don't like the way that we're playing the game. It's like complaining that putting your bishop on the same diagonal line as the opposing king isn't in the spirit of chess.

Richard "Lord Clyde's Shovel" B

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