Mises Wire

Facebook icon
LinkedIn icon
Twitter icon
< | < | <

Hazlitt on Loopholes


From one of his Newsweek Business Tides columns: "The favorite demand of most tax “reformers” is that we must “close the loopholes.” But what is a loophole? Those who invoke the catchword never refer to the exemptions and deductions that apply to the low-bracket incomes. They use it only to stigmatize the deductions that those who earn high incomes are permitted to take, implicitly or explicitly, by the law. They do not stop to ask whether a deduction is fair or unfair. Do a few abuse it? Then it should be denied to everybody. Even President Kennedy, in his tax message to Congress on April 20, 1961, said: “The slogan—‘it’s deductible’—should pass from the scene.” He was talking of expense-account abuses; but if his statement were taken without qualification, no expense deduction, no matter how legitimate, would ever be allowed. Even a company that lost money would pay taxes on its gross. It is only because of expense deductions and “loopholes” that most businessmen are able to stay in business at all. The kind of tax reform we most sorely need is not that proposed by the “loophole” closers. The most important tax reform is to stop confiscation."

Dan Sanchez is a libertarian freelance writer. He is a contributing editor at Antiwar.com, where he writes a regular column, and an independent journalist at Anti-Media. His work has frequently appeared at such websites as Zero Hedge, the Ron Paul Institute for Peace and Prosperity, and David Stockman's Contra Corner. His writings are collected at DanSanchez.me.

Image source:

Add Comment

Shield icon wire