Obama nominee pulls out over tax trouble

Which one?  I am more than willing to grant that not every nominee deserves to be appointed to rule over me.  But I'm also worried about the incentives we are producing by applying tougher standards.  Knocking out the caught cheaters won't make all the DC people honest or virtuous.  The long run effect is to select for people who have known — from the very beginning — that they seek power and who are willing to pay money to the taxman to keep that option alive.  We are selecting for people who are very good at covering up their misdeeds.  We're selecting for honest people too.  There's lots of posturing on this issue, but I'm not sure whether the net effect of the crackdown is positive, once you take all these selection effects into account.  There's something to be said for selecting people who are relatively bad at cover-ups. 

There's also something to be said for increasing the wages paid to top appointees, as they do in Singapore.  That would encourage more tax compliance without just selecting for the power seekers.


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