I am really not a tax lawyer. This will become obvious soon enough, but it’s important for my readers to keep in mind from the very top. Still, this spoke to my heart:
I sometimes think I missed my calling as a tax lawyer. Tax lawyers, if they are any good, approach the world with a childlike sense of wonder. Someone (Congress) has given them a magical toy (the tax code) to play with, a toy whose possibilities are limited only by their imagination. And their job is to come up with new games to play with it, new combinations to try, new solutions to the riddles hidden in the code.
– Matt Levine
Well, Congress gave Americans a new toy, and so far all rationalists / effective altruists have done is whine about it. I actually think that Scott’s thinking about the tax plan is very confused. The tax code is not a purchase of $100 billion, it’s better thought of as enacting a transfer and establishing a set of incentives. The transfer is mostly from people who will pay taxes in the future (young Americans) to people who owned American stocks in 2017 (older and richer Americans). This part isn’t great. The incentive is for people and corporations to make money in the US. This part isn’t terrible.
We can compare this to Bernie Sanders’ free college plan, which Scott thinks is better. Subsidizing college would transfer money from taxpayers to colleges, which is pretty bad. It will also incentivize marginal students to waste more precious years in colleges while making the zero-sum game of credentialism and signaling ever more destructive, this part is really fucking bad.
The tax plan is poorly thought out, unfair to blue states, and inefficient. But it’s not a catastrophe – it’s not even as bad as free college. But it doesn’t matter how bad we think the tax plan is, the plan is here to stay (for at leat a few years). The important thing to focus on now is how do we exploit it?
If we’re playing a board game and you munchkin the rules, I can complain that you’re following the letter of the law but not the spirit. But the government can’t complain – it writes the rules, and it does so with the full expectation that every citizen will do their damnedest to exploit them as they are written. If we’re worried that greedy plutocrats get most of the gains from gaming the system, that just means that good folk like us need to step up and do our fair share of cheating optimizing.