Patented tax avoidance

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The NJ Biz reported yesterday that:

Growing concern over a federal agency's four-year-old decision to grant patents on tax strategies has some CPAs in New Jersey and elsewhere worried about counseling clients on tax planning.

But "if drugs can be patented, why not tax strategies?" asks E. Martin Davidoff, a Dayton CPA and tax attorney, referring to a decision by the U.S. Patent and Trademark Office to extend patent protection to tax strategies.

I have to say I linked this story to an excellent piece by Dennis Howlett yesterday on the professions and self interest, which I recommend. The reason is simple: this is the profession putting its interests above those of the society it serves and which grants its right to charge super-normal levels of fee.

And if you want an answer as to why not, just consider this. Suppose the government wants to outlaw a patented tax strategy. Does that mean they will have to pay compensation to the patent holder for loss of royalty income? In a society like the US that is on obvious risk. And in that case the right to legislate on tax has been privatised. That's why not, Mr Davidoff.

Tax is a public good. The problem our profession has is that it sees it as a public bad. And that is undermining not just our profession, but the stability of our society as a whole. That's the inevitable result of putting individuals above communities. And that's what our obsession with private property is doing.

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