A Liberal Learns About the Laffer Curve
The IRS recently announced plans to tax the goody bags that celebrities receive at the Oscars. Predictably, that prompted the Academy to announce that they will no longer give them out.
This, of course, is a wonderful example of the Laffer Curve. If you tax something, you'll get less of it.
That lesson doesn't seem to be entirely lost on Nora Ephron, a liberal movie director/producer (e.g. Sleepless in Seattle). In a blog post that she wrote today, she complains about the IRS' decision, but her argument does seem to contain some cognitive dissonance (a condition, I believe, that is shared by all liberals).
In the blog post, she quotes an IRS commissioner who comments about the goody bags. Excerpt:
"It was just so clearly taxable we felt we had to step in..." said IRS Commissioner Mark V. Everson. "You can't let the rich get away with something." This is a ludicrous remark given the inequities of the current tax code, but I can hardly object. And the goody bags are just the tip of the iceberg. Almost nothing that is worn by celebrities - on red carpets and even in everyday life - is actually paid for, and except for the jewelry, almost all the clothing that is "lent" for awards ceremonies is kept by the wearer, tax-free. Soon, I'm sure, the IRS will move from goody bags to all this free designer clothing. From there it will be a hop-skip-and-a-jump before they get to things like taxing complimentary drinks at the end of dinner, and the bottle of champagne they give you in hotels that no one ever drinks.
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