John Feehery: Speaking Engagements


Knees And Taxes

Posted on November 21, 2012

My knee is killing me. I don’t know what happened, but for some reason, on a flight back from Florida, my knee started stiffening up and now I can barely bend it.

Getting into a car is a trauma. Walking up and down stairs is a real chore. My wife says I look like an old man, the way I limp around.

As a result of the pain in my knee, I overcompensate. I avoid pain at all costs. I try not to bend the knee at all if I can avoid it.

As a result of my aching knee and my efforts to avoid pain, I go through all kinds of contortions. I bend this way and that, which puts strains on my other leg and my back.

It is amazing what people will do to avoid sharp pain. It is also amazing what people will do to avoid paying taxes.

It is often said that the only things in life that are inevitable are death and taxes.

But if you have the resources and the wherewithal and the smarts, you can avoid taxes. And rich people who have all of those things do their level best to do exactly that.

They move overseas. They park their money in tax havens. They create shadow organizations. They buy companies. They shut down production lines. They use every loophole in the book.

Democrats try to use the tax code to punish people. I remember when they passed a luxury tax because they believed that people who buy yachts should pay more for the privilege. What happened? The working stiffs who built those yachts lost their jobs because rich people decided not to buy the more expensive boats.

Democrats are now poised to push for a tax rate aimed at millionaires. They want to skin those rich people. But my guess is that those rich people will go through all kinds of contortions to avoid paying those taxes.

That is why Republicans are pushing for tax reform and not for increased tax rates. Instead of creating a dynamic that symbolically increase tax rates but does nothing to get rid of loopholes, which will not bring in more revenue but instead will inspire more tax avoidance schemes, tax reformers believe that bringing down rates while getting rid of loopholes will actually achieve two purposes. First, you get more revenue because it makes it harder to avoid taxes. Second, you get more economic growth, because lower tax rates and a more transparent leads to a healthier and more predictable economic system.

I should get a doctor to take a look at my knee, so I can stop all of these contortions that I go through to avoid pain. We should all support tax reform so rich tax payers can stop going through all of these contortions to avoid paying taxes.

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