Against Gameable Legislation

Because in the private sector, any legislation that can be gamed will be gamed. Christopher Hayes reports:

Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. And get this: even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry--handsomely--to use more fossil fuel.

"Outside consultants" first advised International Paper to start employing this nefarious technique, and after the company received a check of $71 million from the IRS, its stock price rose 12 percent. I'm not going to say whether the law was passed under the auspices Bush or Obama because that is irrelevant. The larger point is that depending upon the private sector to not game legislation is like depending on a polar bear to not attack you during feeding time.

(HT: Kevin Burke)