Imagine if, in the middle of the football game, the gridiron gods suddenly changed the rules. Touchdowns scored on running plays would now be awarded 12 points, while passing TDs remained 6 points. Further, imagine that those same rule makers announced that at some point this season – or maybe next season – teams would get an additional 20% on each scoring play if the average weight of their offensive line was below 300 lbs. Unless they decide to incentivize teams with larger players, and award the extra 20% if their offensive linemen weighed more than 340 lbs. And imagine if at Thanksgiving “the committee” decides there aren’t 12 teams deserving of being in the college playoff, so they quickly design a 7-team playoff on the fly.
This is a snapshot of how our federal income tax system works. Every four years, taxpayers and voters face a new round of conflicting proposals to overhaul the tax system. Some proposals are designed to benefit certain groups, while other proposals are structured to punish groups.
Of course, the primary goal of all proposals is to increase the candidate’s odds of getting elected.
When Barack Obama was elected president, lawyers and accountants were bombarded with people wanting to make changes to their estate plans, because of certain changes Obama promised. When those changes never materialized, those same taxpayers wanted to undo the irrevocable changes they made in their estate plans.
It is a horrible way to create rules.
One of the few things on which essentially all economists agree is that an ideal tax system is consistent and predictable – so why not imbed the entire federal tax code into a Constitutional amendment? Not only would this provide planning stability, it would also radically reduce tax-related promises and threats from candidates for office.
This new, quasi-permanent tax system would need to be as well-designed as possible, which is why elected politicians could have no role in its creation. My suggestion would be to select a committee, in a modified random process. We should randomly select 1,000 taxpayers and, without revealing the purpose, ask each of them to name the three most intelligent, honest people they know. From this pool of 3,000 nominees, a committee would be randomly chosen to draft our new tax code. Their job would be to design a proposed system that could be ratified by 75% of the state legislatures or ratifying conventions.
Of course, we should never underestimate the ability of politicians to use both monetary promises and threats to gain or retain power. Candidates know that George Bernard Shaw was right when he observed “a government which robs Peter to pay Paul can always count on Paul’s support.”
David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.

