Tax Deductible: What does that really mean?

Today I received an invitation to go on an Alaskan cruise.

 Nice!  However, all was not as it first appeared. It was not a generous invitation from a friend, but another attempt to part me from my hard-earned money. So it was hardly surprising that the person extending the invitation recognised the offer needed sweetening and also announced that it was tax deductible.

Now the idea of an Alaskan cruise appeals to me as much as to the next person. Throw in the idea of some training each day and there might even be a chance that I could delude myself that it was a brilliant way to kill two birds with one stone. So the fact that it is tax deductible could well be a clincher. So, apart from bad timing, why should I not even consider it?

The whole scenario illustrates precisely the nature of our flawed tax system. This is effectively a personal tax subsidy for my participation. After all, why should you pay for me to have a good time? Even worse, it effectively means that, by electing not to go, I am not only losing out on the experience, but also putting my business at a competitive disadvantage compared to my competitor who does decide to go, since he will now effectively pay less tax on his reduced profits.

Shakespeare was wrong when he wrote “The law is an ass.” It is the lawmakers who are asses!