“It must be something really important, even terrible, that he’s trying to hide,” Hillary Clinton said during Monday night’s debate. She suggested that Donald Trump hasn’t released his tax returns because they would reveal venal tax-dodging: “Maybe he doesn’t want the American people, all of you watching tonight, to know that he’s paid nothing in federal taxes,” Clinton charged, “because the only years that anybody’s ever seen were a couple of years when he had to turn them over to state authorities when he was trying to get a casino license, and they showed he didn’t pay any federal income tax.”
It was an assertion that Trump seemed to endorse: “That makes me smart,” he responded, in none-too-clever fashion.
None-too-clever because Trump seemed to accept the idea that acting to minimize taxes is some sort of sneaky scheme by which the savvy out-maneuver Uncle Sam. In truth, minimizing taxes means you have acted in ways the government wants you to act.
The tax code, instead of being a simple means for collecting the revenue needed to operate the federal government, has become an all-purpose means of regulating behaviors that Congress is otherwise not constitutionally empowered to regulate.Consider just one prominent and recent example: The Supreme Court ruled that Congress could not, under the Commerce Clause, require citizens to buy health insurance, nor penalize them for failing to do so. But this core element of Obamacare was found, nonetheless, to be constitutional, because a majority of the court ruled the “individual mandate” to be a tax.
The expansive power of taxation makes it a favorite vehicle for implementing any and every sort of federal government policy. Take the Clinton campaign’s promise to “have more than half a billion solar panels installed across the country by the end of Hillary Clinton’s first term.” How will that be accomplished? Yes, Washington will write a lot of checks. But the feds will also get individuals and corporations to put their own money into renewables by offering them tax breaks in exchange. Clinton is eager to provide such breaks to get the solar panels she wants, promising “to extend federal clean energy incentives and make them more cost effective both for taxpayers and clean energy producers.”
When you hear politicians talking about “tax incentives” for this or that, they are talking about rewarding companies and people for doing what the government wants them to do. How strange it is, then, that the same politicians turn around and demonize those who accept tax incentives. Is Hillary going to denounce the plutocrats who reduce or eliminate their federal tax obligations by investing in solar panels and wind farms? Will she say of them, as she did of Trump, that they haven’t paid their share, having contributed “zero for troops, zero for vets, zero for schools or health?”
When, then, will the left stop punishing people who are simply doing what the federal government has encouraged them to do? If they don’t like people responding to tax credits, perhaps they might be willing to forgo the regulatory power that granting tax incentives gives them.
