Acton Institute Powerblog

The Complex Tax Code

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Today at Capital Commentary I discuss the size and scope of the tax code in the US relative to its basic purposes.

In “Back Door Social Engineering,” I argue, “When governments run huge deficits in part because of the complexity of its tax system and the ability of people and institutions to engage in large-scale (and legal) tax avoidance, there is something deeply wrong with the system.”

The basic purpose of taxes is to raise money for the government, not to determine social behavior. We have laws for that.

Read the whole thing here.

Jordan J. Ballor Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is a senior research fellow and director of publishing at the Acton Institute for the Study of Religion & Liberty. He is also a postdoctoral researcher in theology and economics at the VU University Amsterdam as part of the "What Good Markets Are Good For" project. He is author of Get Your Hands Dirty: Essays on Christian Social Thought (and Action) (Wipf & Stock, 2013), Covenant, Causality, and Law: A Study in the Theology of Wolfgang Musculus (Vandenhoeck & Ruprecht, 2012) and Ecumenical Babel: Confusing Economic Ideology and the Church's Social Witness (Christian's Library Press, 2010), as well as editor of numerous works, including Abraham Kuyper Collected Works in Public Theology. Jordan is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary.


  • Kevin


    While I agree with your main points–simplify the tax code; it should not be about social engineering–I’m not sure you get at the root of the problem. Are sin taxes sincerely designed to discourage behaviors, for example, or are they merely a politically expedient way to raise funds. (e.g., Do tax policy makers *really* want people to stop smoking cigarettes entirely? They’d lose revenue.)

    Similarly on the positive side. Are the mortgage and child deductions really motivated by a desire to increase home ownership and child-bearing? Or are they instead politically motivated moves to satisfy certain constituencies or to enhance political resumés on certain issues (e.g., “family values”)?

    In other words, the taxes themselves aren’t so much social engineering
    as schemes that capitalize on the mores of the citizenry—or the desires
    of the majority to social engineer, if you prefer.

    I honestly don’t know the answers to the questions above, but count me as skeptical. Answers would be found by looking at the legislative history of some of these measures. Possibly (probably) the initial moves were the result of cooperation between utilitarian politicians and genuine social engineers, so maybe your basic point stands. Or maybe you can adduce other examples that are not vulnerable to the questions I’m raising.

    • Thanks, Kevin. I appreciate your criticisms. I would say, though, that your observations get to the difference between the way politicians “frame” issues and what they are “really” trying to do. 

      So one way of answering would be to acknowledge that what you say is true, but that even where politicians aren’t actually trying to encourage or discourage behaviors, they do explicitly frame their support in these terms. Perhaps that’s just about appeasing the moral crusaders. 

      But it seems to me that this is one of the dominant narratives, especially in the case of sin taxes. Smoking is bad, we want less of it, so let’s tax it. As has been pointed out very often, this results in a kind of hypocrisy, as the state becomes increasingly dependent on activities it claims to be discouraging. 

      So there may be a real disconnect as to the “why” of the voters and the politicians. But I do think it is basically true that most people expect taxes to encourage or discourage behavior, and as to my basic point, I think this is a fundamental distortion of the purpose of taxation. In the first place we don’t tax something because we want to discourage it (e.g. businesses)…we tax things because government needs funds to function. If it were the other way around, the only taxes would be “sin” taxes.