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Archive for February 3rd, 2011

One of the many great things about America’s Founding Fathers is that the Declaration of Independence refers to “unalienable rights” including “life, liberty, and the pursuit of happiness.” But there’s not even a suggestion that it is the job of government to provide happiness.

Brazil’s politicians have a different view of such matters. They’re considering an amendment to the nation’s Constitution that would create a similar right, but with the expectation that it would be the job of government to provide happiness.

There are two huge problems with this approach. First, government can’t give something to one person without first taking it from another. So if politicians decide that this new “right” to happiness means more redistribution of food and housing (things supposedly “guaranteed” by the Brazilian Constitution already), then that means more government coercion through the tax system. Second, happiness isn’t achieved by being a moocher. Dependency breeds resentment, not joy.

It would be simple to dismiss this proposal as a hollow political stunt, but there actually are many things that Brazil’s government could do to open doors for the poor, such as enforcing property rights, opening markets, deregulating the economy, and lowering tax rates. Then poor people would have the ability to achieve true happiness by improving their own lives rather than kowtowing for crumbs from a corrupt political elite.

Here’s a report on Brazil’s Orwellian happiness proposal.

…a bill to amend Brazil’s Constitution to make the search for happiness an inalienable right is widely expected to be approved soon by the Senate, which reconvened Tuesday. The bill would then go to the lower house. …supporters say the happiness bill is a serious undertaking despite the revelry, meant to address Brazil’s stark economic and social inequalities. “In Brazil, we’ve had economic growth without the social growth hoped for,” said Mauro Motoryn, the director of the Happier Movement, a non-governmental organization backing the legislation. “With the constitutional amendment, we want to provoke discussion, to seek approval for the creation of conditions in which social rights are upheld.” Similar explorations of officially finding happiness have been pushed by other governments. Both Japan and South Korea include the right to happiness in their constitutions, and earlier this month, the British government detailed plans to begin a $3 million project to measure citizens’ well being. …The bill before Brazil’s Congress would insert the phrase “pursuit of happiness” into Article 6 of the constitution, which states that education, health, food, work, housing, leisure and security – among other issues – are the social rights of all citizens.

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The internal revenue code is nightmarishly complex, as illustrated by this video. Americans spend more than 7 billion hours each year in a hopeless effort to figure out how to deal with more than 7 million words of tax law and regulation.

Why does this mess exist? The simple answer is that politicians benefit from the current mess, using their power over tax laws to raise campaign cash, reward friends, punish enemies, and play politics. This argument certainly has merit, and it definitely helps explain why the political class is so hostile to a simple and fair flat tax.

But a big part of the problem is that tax lawyers dominate the tax-lawmaking process. Almost all the decision-making professionals at the tax-writing committees (Ways & Means Committee in the House and Finance Committee in the Senate) are lawyers, as are the vast majority of tax policy people at the Treasury Department and the Internal Revenue Service.

This has always rubbed me the wrong way. Yes, some lawyers are needed if for no other reason than to figure out how new loopholes, deductions, credits, and other provisions can be integrated into Rube-Goldberg monstrosity of existing law.

But part of me has always wondered whether lawyers deliberately or subconsciously make the system complex because it serves their interests. I know many tax lawyers who are now getting rich in private practice by helping their clients navigate the complicated laws and regulations that they helped implement. For these people, the time they spent on Capitol Hill, in the Treasury, or at the IRS was an investment that enables today’s lucrative fees.

I freely admit that this is a sour perspective on how Washington operates, but it certainly is consistent with the “public choice” theory that people in government behave in ways that maximize their self interest.

There’s now an interesting book that takes a broader look at this issue, analyzing the extent to which the legal profession looks out for its own self interest. Written by Benjamin H. Barton, a law professor at the University of Tennessee, The Lawyer-Judge Bias in the American Legal System explains that the legal profession has self-serving tendencies.

Glenn Reynolds, of Instapundit fame, interviews Professor Barton about his new book.

I freely confess that I’m looking at this issue solely through my narrow prism of tax policy. But since Barton’s thesis meshes with my observations that tax lawyers benefit from a corrupt tax system, I’m sympathetic to the notion that the problem is much broader.

One of the most quoted lines from Shakespeare’s Henry VI is, “let’s kill all the lawyers.” But rather than making lawyer jokes, it would be a better idea to figure out how to limit the negative impact of self-serving behavior – whether by lawyers or any other profession that might misuse the coercive power of government.

This is one of many reasons why decentralization is a good idea. If people and businesses have the freedom to choose the legal system with the best features, that restrains the ability of an interest group – including lawyers – to manipulate any one system for their private advantage. This new study by Professors Henry Butler and Larry Ribstein is a good explanation of why allowing “choice of law” yields superior results.

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