It’s March, which means the deadline to pay your taxes is just around the corner. That makes it a great time to reflect on the complexity, and sometimes the absurdity, of the U.S. tax code. The federal tax system alone is over 10 million words long, and each state has a tax code with its own unique quirks, as well.
Over at Economics 21, Preston Cooper has outlined some of the weirdest tax credits available just in his home state of Maryland. They include a film tax credit, a Maryland-mined coal tax credit, and two different oyster-related tax credits. One of these reimburses taxpayers for the cost of oyster floats (devices used to farm oysters), while the other rewards taxpayers for recycling oyster shells.
While a break from taxes might sound good, even if the form is a little weird, in reality they can lead to higher tax rates overall, as Cooper points out:
“In fiscal year 2016, such tax breaks cost the state $5 billion, more than the state collected in sales taxes. Such carveouts are a boon to those who take advantage of them, but their cost forces the state to raise tax rates so the government is not starved of funds.”“]
Something to keep in mind when you file your own taxes.
You can read the whole post over at Economics 21.