The Tyranny of the Tax Bill

By: Dave Dodson, Conservative contributor to The Boston Globe.

“Taxation without representation is tyranny!” was the rallying cry 244 years ago when a crowd of Boston patriots dumped 342 chests of tea into Boston Harbor. But if those same freedom-loving colonists lived among us now, they’d have a strong lesson for us: America is suffering the same tyranny today.

Earlier this month House Speaker Paul Ryan released the tax bill, written in secret by the Republican Party, with 429 pages of proposed changes to the tax code. He then pressed the members of Congress to vote on it in 13 days. They did what they were told. Without floor debate, or thoughtful review, nearly every Republican representative came out in support of 429 pages they almost certainly never read.

The Internal Revenue Code is now 74,608 pages long, and buried in those tens of thousands of pages is a tax scheme that virtually no American understands. Therein lies the deceit: We rely on a system of representative democracy. We entrust others to represent our interests. It is not our job to read those 74,608 pages, which is why when they tell us it’s a middle-class tax cut, we believe they are telling the truth.

We entrust them while the rest of America takes on equally important jobs, like teaching our children, fighting overseas, digging coal, or making cars. Every day the middle class does its part, while our representatives in Washington, who have taken an oath, continue to fail to do theirs.

Both parties play the same tyrannical game. During the last 35 years, while control of the Senate and the House has been nearly equally shared by Republicans and Democrats, the number of pages in the tax code has tripled. Representatives from both parties continue to write paragraphs they know will never be seen by those they were elected to represent.

In recent weeks, the leaders of the House and Senate have been delivering soundbites from behind a podium decorated with a blue logo and the words “Tax Reform”— professing they have simplified the tax code for the middle class.

What most Americans are shown is the top tax bracket of 39.6 percent. What we fail to see, though, are the thousands of pages that allow wealthy people to avoid ever paying that rate. To illustrate this, Warren Buffett generously released his 2015 tax return to the public, showing he paid taxes at a 15.5 percent rate — the rate someone making $50,000 per year would pay.

The same is true for corporations. We are told that corporations pay a 35 percent tax rate, when in fact many pay nothing at all, and on average they pay only 17 percent.

I’m not coming from a place of sour grapes here. I am lucky enough to be a one percenter, and I’m telling you: The tax bill was not written for the middle class. It was written for people like me.

President Trump, who refused to release his own returns, acknowledged that he paid very little in taxes. “That makes me smart!” he bragged, to which those of us in the top 1 percent rolled our eyes. Why? Because any businessperson knows wealthy people don’t have to be smart to pay lower taxes. The game is rigged in our favor. You don’t have to be smart to win when you get to write the rules.

Samuel Johnson said the taxation system of King George was “a mere cobweb, spread to catch the unwary, and entangle the weak.” That’s the same outrageous game our representatives are playing against us today. We’ve been fooled into thinking the tax code is just too complicated for the average American to understand. But that’s hardly a line of thinking Sam Adams or Paul Revere would have accepted.

There is the saying: “Those with the gold get to make the rules.” But that is how great economic systems fail, not how they thrive. Real tax reform, the kind we should insist on, will be about creating a system that doesn’t favor those with power or access. It’ll be simple and understood by all Americans — much like the tax code of our grandparents, who lived during a time when America won two world wars and ushered in another industrial revolution.

If we really want to make America great, we’re going to need to chuck those 74,608 pages into the harbor and insist on a truly reformed tax system that represents the interests of an interstate truck driver as faithfully as a millionaire. Letting lobbyists for the moneyed classes build ever more complex tax rules that even our representatives don’t understand is 21st-century tyranny.

David Dodson is a general partner of Futaleufu Partners and a lecturer in management at the Stanford Graduate School of Business.