Ignorantium
More reactive than flourine. Funnier than boron.
I do not think that word means what you think it means
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Chapter 4,323
"Loophole"

Friends, can we stop saying that we need to close "loopholes" in the tax system that are being exploited by corporations or rich people or whomever?

A "loophole" is an unintended ambiguity or omission from a law. It's not put there intentionally but is caused by an oversight, badly conceived law, etc. The "loopholes" supposedly being exploited today are real deductions and credits that are on the books and completely intentional and being legitimately used as intended.

"Why does it matter?" you ask. "Aren't we still losing that tax revenue whether or not they 'loopholes' are intentional or legitimate deductions?"

Indeed. That is a very astute observation. (That's why I like you. You're very smart.) But it's also the point: our tax code is written in a manner so as to reward certain behaviors (e.g. having kids, home ownership, etc.) and penalize others. They are not "loopholes" (i.e. unintended) but put there to spur some behaviors we think we like and curb behaviors we think we don't like. 

So here's the question: Is that the job of the tax code? Is the tax code (and thus the government which creates it) there to reward and punish or is it there to collect money for the fisc so the government can do its job?

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1 Comment to “I do not think that word means what you think it means”

  1. Melissa Wood Melissa Wood says:

    The tax code, if written properly and reviewed to ensure there are no true loopholes, is to collect funding to run the government. There would be no if "x" then "y" based on "a,b, & c" in certain cases of "z" situations. It would be clear and concise.

    However it is more fun to have what is the political definition of loopholes. This allows for both sides of the aisle to toss jargon around without actually working on a defined plan by the deadline. We all live by deadlines and are held accountable for meeting them. It's time to close their loopholes in meeting deadlines.

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