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Tuesday, January 29, 2013

Reynolds: Tax the Revolving Door

USA Today op-ed:  Tax the Revolving Door, by Glenn Harlan Reynolds (Tennessee):

When President Obama ran for president in 2008, he promised to "close the revolving door" and clean up both ends of Pennsylvania Avenue, but that hasn't happened. Which isn't to say that it shouldn't happen now. But I don't think the usual ethics-rules approach is enough.

The problem with ethics rules for this sort of thing is that they tend to be ignored, or distorted. So I say, let's involve the most effective behavior-control machinery in America: The Internal Revenue Code.

In short, I propose putting a 50% surtax -- or maybe it should be 75%, I'm open to discussion -- on the post-government earnings of government officials. So if you work at a cabinet level job and make $196,700 a year, and you leave for a job that pays a million a year, you'll pay 50% of the difference -- just over $400,000 -- to the Treasury right off the top. So as not to be greedy, we'll limit it to your first five years of post-government earnings; after that, you'll just pay whatever standard income tax applies. ...

[I]t is a principle of economics that when you tax something, you get less of it. So if we're worried about revolving-door government, we should tax it, so as to get less of it. And since the revolving door generates bad effects for society, taxation would be an appropriate way of discouraging it.

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Comments

Good idea...and of course ex congressmen, Senators, staffers, military decision makers. Influence peddling has been and unfortunately probably always will be, the number one industry in Washington. Too many people make too much money for it to go away. And using the IRC would just, dare I say it, make it more "complex". I would be willing to pay a additional tax to anyone who can convince the Congress to quit using the tax code as a political football every 2 years. We have a lot of problems in this country, not all of which has to do with the IRC. But most of the bad solutions to these problems do involve the IRC. Hence the complexity.

Posted by: George | Jan 29, 2013 10:56:53 AM