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Barry Ritholtz says that Phil Mickelson must be stupid for (we guess) not employing ‘ordinary tax planning moves’ to reduce his tax exposure, moves such as “Establishing a Family Foundation”.
Let’s assume the extreme case and say that Mickelson is doing none of these things. Question: Why should nominal tax rates on a Phil Mickelson be so high that unless he “establishes a Family Foundation”, and related stuff, he is stupid?
One could plausibly say they want tax rates to be high on a Phil Mickelson because they want that extra revenue. Only, such a person wouldn’t turn around and say ‘form a Family Foundation, dummy’. If the goal were revenue, there wouldn’t be (and one wouldn’t want, or advise) all these ways to “minimize their taxes”.
Oh, but maybe these ways of minimizing taxes are so socially-beneficial that we want rich people doing them. You know, like “forming a Family Foundation”. Really? Is that really a thing that society wants and needs all rich people doing? So if you’re a rich person you have two options (1) form a Family Foundation (2) you’re a stupid dumb-ass?
What is the sense of arguing for a tax code with a certain set of rates, and then when people complain about those rates, instead of saying maybe they have a point you say ‘you moron, you could jump through some hoops’? In other words, why do we want the high rates + the hoops instead of just lower rates full-stop?
Is it because we want to punish, most of all, people who don’t or won’t or can’t jump through hoops? Seems like it.
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