The Loophole Factory

The Wall Street Journal reports:

Congress is creating all of these new loopholes even as overall tax revenues are slowing and this year's budget deficit could reach $450 billion to $500 billion. This will play nicely into the hands of Democrats who contend that the lower tax rates of 2001 and 2003 must expire to pay the government's bills. So we could soon have the worst of all worlds: a leaky tax code full of exceptions for powerful interests, but with ever higher rates to make up for the loopholes. Congress gets PAC contributions in return for the loopholes, plus any extra revenue from the tax hike. The losers are taxpayers who aren't powerful or rich enough to afford a tax lobbyist.

Rent-seeking gone wild.Income taxation is a really bad idea.