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Washington Examiner
Restoring America
18 Apr 2023


NextImg:In the swamp, Tax Day is payday

As I came down to Capitol Hill shortly after Trump’s election in 2016, I saw a protester march by with a sign, illustrated with an outline of the District of Columbia , proclaiming, “Don’t Drain my Swamp.”

In that vein, let me wish you a Happy Tax Day from the city where taxes really are good news.

FIRST, THEY CAME FOR GAS STOVES. NOW, THEY ARE COMING FOR RICE

The Beltway region finds its wealth, and its people find their work and, heck, their sense of purpose, in a tax code that includes both high rates and high complexity.

So Tax Day, which ought to remind the average person of how much of his hard-earned money he never gets to touch, carries a different meaning here in the National Capitol Region. Here, it is our sustenance.

For starters, there’s the massive amount of federal money spent here. Last fiscal year, the federal government awarded $191 billion in spending within D.C. and the five counties that border it.

Much of that is the salaries of federal employees. D.C. brags that federal employees’ average compensation (including benefits) is nearly twice the average compensation of a private sector worker.

But a bigger chunk of that cash flow from U.S. taxpayers to the Beltway region goes to contractors and consultants. Defense companies, homeland security firms, and the data and IT companies that serve the government all haul in massive federal contracts. Whole neighborhoods here are shaped by this massive flood of taxpayer cash.

Then there are the consultants that consult for the federal agencies and their contractors. They all feed their children with the tax dollars you pay.

And the more federal revenue there is, the more demand there is for lobbyists and lawyers who will help companies get subsidies or otherwise profit from federal spending.

That’s just on the spending side. Taxes themselves are good news for Beltway Bandits, too. High tax rates, combined with plentiful credits, exceptions, exclusions, etc., make it very important for companies to hire former Treasury Department or Ways and Means Committee staffers.

This is why Democrats sometimes talk about a corporate minimum tax but will never implement one . Higher rates make special carveouts more valuable and make tax consultants and lobbyists more valuable. It's why Republicans never really reform the tax code. After all, the staffers and members writing the tax code are the ones whose future employment depends on its complexity.

So, Happy Tax Day, to all who celebrate.

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