The¨”Great Game” formerly referred to the 19th Century power struggle between European powers mostly played out in colonial holdings.   However, the ¨Great Game” today concerns taxation.  If I had not chosen a career as a diplomat I most likely would have wound up as a tax expert.  I had the right starting opportunities, working at the Office of Management and Budget (OMB, the economic heart of the Federal Government) or for the Federal Reserve System.  And nothing gets my juices going faster than talking about taxes. 

The 11th hour agreement to raise the Federal Debt limit has been widely touted as a *victory” for the Tea Party since it did not include any increases in taxes.  However, I would point out that the commission that will present ways to further cut Federal expenditures will also be charged with looking at ways to overhaul our tax system.  Great idea that, no mention of tax hikes, just an overhaul that, guess what, will include ways to increase revenues. 

Let me lay one mistaken idea to rest.  The Tea Party is made up, not of the rich, but basically of President Obama´s “overburdened middle class.”  They are mostly everyday Joes and Marys who enjoy modest incomes.  The difference is that they do not trust sending more tax money to the Feds to in turn send it back to them in the way of Federal welfare programs, e.g. health care.   They prefer to keep more of their money themselves and spend it themselves, thus saving all the cost of passing the money through the Federal machine.  That is why they oppose increased taxes.

I look forward to the “Great Game” of tax reform.  There are lots of questionable tax features with many that border on the ridiculous.  But before lashing out at the traditional “raw meat” for the Democrats, e.g. corporation taxes, capital gains taxes, “tax loopholes,” “death taxes,” and off shore financial holdings, it would be worth exploring some tax policies of other countries that are considered to be “progressive” tax states.  Believe it or not Sweden and Finland have no inheritance tax.  That is why wealth there is accumulated by families, not by individuals.  Many countries do not have a tax on corporate earnings.  The best gimmick is the one in Germany.  The company does not have to pay tax on earnings held in reserve funds.  Thus all German companies have big reserve funds from which they withdraw funds in years when they incur losses and thus have no tax to pay.  Citizens of all countries except the USA generally do not pay taxes to their home countries on money earned abroad.  And there are more examples of tax procedures that would turn a Democrat tax hawk´s hair grey. 

Looking in my crystal ball I see a national consumption tax being adopted, similar to Europe´s VAT.  I see lots of “tax loopholes” being closed which means that we tax cognoscenti will have to go back to the drawing board to find new loopholes.  There is even the possibility of a “flat tax” which I “flatly” oppose.  A simple tax is better for the taxman.  A complex code is better for the tax payer.  

Let the “Great Game” begin.