Monday, October 10, 2011

Laws of Unintended Consequenses

I listened to Jack Painter's debate on NPR about Ohio Issue 3.  It came to me that most of what was being debated (on both sides) was speculation about the unintended consequenses of the vote.  This is why I'm in favor of mostly "doing nothing" when it comes to legislation.  After over 200 years, the complexity of legislation has created logic paths that are filled with unintended consequenses. 

Case in point is our tax code (presently on my mind since I just completed 2010 taxes).  In the discussion last night with a tax accountant (at J.Z.'s 50th birthday party), I said working with Turbo Tax is like playing a game of "Whack a Mole".  If you move something in one area to reduce taxes, up pops the mole in another area to take it away.  Trying to understand why - and/or what the social engineering reason for that part of the tax code - is almost impossible.  Therefore our legislators could never have predicted the unintended consequenses of the interaction of the complex tax code.

This rule applies to business as well.  A company should be very cautious about the "incentives" they place into the employee compensation package.  Too often these are not well thought out and errant behaviour and unprofitable results occurs.  Environmental issues are the same and why great analysis is done on LCA (Life cycle analysis). 

So be a libertarian - vote for no votes (hence fewer laws).

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