From Monday’s Wall Street Journal:
If you thought Bernard Madoff’s Ponzi scheme was bad, wait until you hear about the inverted pyramid scheme the federal government is working on. While Mr. Madoff preyed on people who trusted him with their money, the federal government has everyone’s money, and the implications of its actions are worse.
David GothardPicture an upside-down pyramid with its narrow tip at the bottom and its base on top. The only way the pyramid can stand is by spinning fast enough or by having a wide enough tip so it won’t fall down. The federal version of this spinning top is the tax code; the government collects its money almost entirely from the people at the narrow tip and then gives it to the people at the wider side. So long as the pyramid spins, the system can work. If it slows down enough, it falls.
This isn’t about rich v.s. poor, it’s about designing a system that is sustainable and fair. Heritage’s Curtis Dubay recently blogged on this and offered suggestions for President Obama’s vague tax reform panel. Also, CATO recently made a new video on the convoluted tax code:
[youtube]http://www.youtube.com/watch?v=vGIfbAt8voU[/youtube]