Something taxing and off topic...

	Well this blog does not have a topic, occasionally themes, but is a place for the bunny muse. Occasionally Eli ventures into the realm of economics. Recently there was a debate on the Wall Street Journal site between Max Sawicky (in the red trunks) and Tyler Cowan (in the brown) on tax policy. A lot of Steve Forbes friends came out to cheer, mostly for the Flat Tax, getting rid of tax on business (e.g. on them), etc. Eli is not much amused by this attempt to shrink government income until it can be drowned in a bathtub. Katrina shows that the tub can be your city or town and there is a fair amount of collateral damage. I posted this in the comments section, but since the topic arises as the living dead from time to time, I thought I would put it here in order to have something to refer to on occasion.
	"To stop taxing business is an invitation for those who operate small businesses to evade and cheat on their taxes even more than they currently do. And they do. It is well known that the greatest intensity of tax cheating occurs among small business proprietors. Even without outright cheating the opportunities of shifting expenses which have a personal benefit to business expenses (e.g. auto purchase or rental) are endless and used. Eliminating business taxation would be just another invitation to the ball. Whenever this is pointed out the wounded bleating is louder than a 1970s rock concert, but folks, it is true. Eliminate all deductions? But those go on Schedule A, how about eliminating some of those expenses on the other schedules. In other words deductions that decrease the taxes of wage earners bad, expenses that decrease the taxes of businesses and business owners good. Not. When I see this suggestion from someone who only files on a 1040 with Schedules A and B I might take it seriously, but then again, maybe not. The definition of income and business expenses is what bloats the tax code. We could have a simple tax code if folk like Steve Forbes would agree to give up definitions of income which benefit him. If corporations have the rights of individuals, why are they not taxed as individuals. Pick and choose is so much fun." For those of you who doubt Eli, ask anyone you know who operates a business, or is pretty high up in one, who owns or pays for the auto they drive. All of the one's that I know drive business owned autos.