Wednesday, November 8, 2017
Catherine Rampell has a snarky but sound op-ed explaining some perverse incentives created by the Tax Bill. She writes:
Consider a hypothetical, similar to one New York University School of Law’s Lily Batchelder suggested to me recently: A family business has been passed down to several siblings with varying levels of industriousness and IQ.
The most competent sibling works for her family’s company full-time. The least competent sibling kicks in a few hours of work each year, but otherwise spends his time popping bottles of champagne and hunting....
Under the Republican tax bill, the lowest tax rate is paid by the ne’er-do-well brother, rather than by the worker-bee sister who actually grew the business. Although, with a good enough accountant, she might be able to convince the Internal Revenue Service that she’s just as lazy and uninvolved as her brother.
This is a strange way to design tax incentives.
Catherine Rampell, Who Wins Biggest in The GOP Tax Plan? The Idle Rich, Washington Post, Nov. 6, 2017.