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I Goofed, You Pay

This letter of mine was published in yesterday’s edition of USA Today:

Raising taxes on private firms is a mistake

Donald J. Boudreaux, chairman, Department of Economics, George Mason University – Fairfax, Va.

Rep. Eric Cantor, R-Va., is correct that raising taxes on private
equity firms is neither necessary nor appropriate for fixing the
alternative minimum tax (AMT) ("Don’t hike partnership taxes," Opposing view, Taxes debate, Dec. 6).

The reason, however, is more fundamental than the fact that such firms benefit ordinary Americans.

Not indexed for inflation, the AMT was never meant to tax the
millions of Americans whom it will now tax if Congress doesn’t fix it.
In other words, taxing people in this way is a mistake.

What ethical argument justifies Congress shifting the costs of its mistake onto others?

If Jones mistakenly budgeted to spend dollars that he wrongly
thought would come to him from Smith, is Jones entitled then to take
this amount of dollars from Williams in order to "pay for" correcting
his error?


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