Tax Policy 101 – Yes

When Congress creates a new tax deduction they’re acknowledging the power these incentives have over public behavior. When home mortgage interest was first singled out to be a tax deductible expense, it wasn’t meant as a pat-on-the-back for then-current homeowners; lawmakers were attempting to stimulate home purchases and make new homeowners out of renters and boarders. Then and now, this spurs sales of homebuilding materials and everything that goes into a home, from new washing machines to light bulbs, and since the 1950s has been the single greatest indicator of the country’s economic health.  Creating a tax deduction for gym membership would unquestionably cause a large increase in memberships at gyms all over the country. Ostensibly, this deduction would encourage more U.S. taxpayers to proactively take greater interest in the health-improving exercise and weight control programs offered at gyms.

It might be a stretch to expect that result from the deduction, though. Individual health is subject to such a number of variables – genetics, education, use of tobacco and other health affecting substances, and a whole raft of other factors—that tracing a blip in future health statistics back to such a deduction as the causative factor would be a fool’s errand. There’s another, more compelling reason to propose this deduction, and it lies at the heart of most tax code controversies: that is, it would be one more small step in the public’s battle to keep more of what they’ve earned and turn less of it over to an irresponsible government. If “that government governs best, that governs least” (Thomas Jefferson), perhaps that government spends best that allows the public to do their own spending. When making tax policy arguments, proponents either for or against any change will usually base a good bit of their position on statements about what the change is likely to do to our economy through the expected consumer reaction: increase sales of luxury boats, for example, or decrease alcohol consumption. Obvious but never openly mentioned is the increased power making any change gives to the decision makers, the House of Representatives. This is why thousands of pages of new federal tax law are enacted every year, but real changes to the tax code are never seriously attempted. If a simple tax code replaced the current one (remember the ten percent income tax proposed in the mid-nineties?) government revenues could increase and collection expenses drastically decrease, but lawmakers’’ ability to use taxation to exercise power over taxpayer actions would evaporate.

I fully favor decreasing lawmakers’ influence over all of us. Have they done anything to show themselves competent to handle our money? I’m pretty sure that I’m a better judge of what is good for my local economy than anyone in congress is; since I’m the one that had to produce the money in the first place I’ll give myself the benefit of the doubt. If gym membership fees aren’t taxed at least some of us will be able to control a bit more of our own money. This year, gym fees; maybe next year it’ll be car payments and furniture purchases. Every change that chips a pebble from the monolith of government influence increases personal freedom and responsibility.