On tax day today, we should remember a key reason why taxes keep going up: Taxes equate to power for elected officials. The more money they have to spend, the more power they have. The more money they have to spend, the more people have to kowtow to them and send campaign contributions either to 1) score a share of the loot or 2) get a special deal or treatment on their own taxes.
We have a sense that there is more corruption than ever in politics, but I think its demonstrably true that people and politicians are not any more or less evil than they were 100 years ago. The only difference is that the sums in play from political influence are so much larger. Its a concept I try to explain to people all the time. The way to fix corruption in politics is not through campaign finance reform, it is through reducing the size of government. Because no matter what restrictions one puts in place, if we set up a system where it pays to invest in politicians, then people will find a way to do so:
In a remarkable illustration of the power of lobbying in Washington, a study released last week found that a single tax break in 2004 earned companies $220 for every dollar they spent on the issue "” a 22,000 percent rate of return on their investment.
The study by researchers at the University of Kansas underscores the central reason that lobbying has become a $3 billion-a-year industry in Washington: It pays. The $787 billion stimulus act and major spending proposals have ratcheted up the lobbying frenzy further this year, even as President Obama and public-interest groups press for sharper restrictions on the practice.
The paper by three Kansas professors examined the impact of a one-time tax break approved by Congress in 2004 that allowed multinational corporations to "repatriate" profits earned overseas....The researchers calculated an average rate of return of 22,000 percent for those companies that helped lobby for the tax break. Eli Lilly, for example, reported in disclosure documents that it spent $8.5 million in 2003 and 2004 to lobby for the provision "” and eventually gained tax savings of more than $2 billion.
These returns rival those in the narcotics trade, and you know how well we have performed in stopping that. We are seeing this effect right now in Arizona, where the County Commissioners of Pima County (centered on Tucson) are under investigation for rigging electronic voting machines to pass a recent tax increase.
Under the scrutiny of criminal investigators, election workers in Phoenix have spent the past week in a painstaking recount of 120,821 ballots that were cast three years ago for a Pima County transit tax.
The primary objective is to determine whether someone rigged the election by tampering with the optical-scan polling machines in Pima County, transforming "no" votes into "yes" votes.
The ballot measures wound up securing a half-cent increase in sales tax to provide cash for roads, buses and other transportation projects.
The reason -- taxes are power, and more taxes are more power.