No one can know that, however, least of all politicians and bureaucrats. Another objection to targeted tax cuts is that the politicians have no way of knowing if they are buying too much of the favored conduct. They are fond of giving deductions and credits to people who save for their children s college education. For the policymakers, there is no such thing as too much education. But of course there is.
Every choice has a tradeoff.
The point is that government s manipulation of behavior by tax code is no better than manipulation by cash subsidy or direct order. Politicians shouldn t be allowed to count targeted tax cuts as true tax cuts. Since they impose a cost on the taxpayer the opportunity forgone by engaging in the government s prescribed behavior they add insult to injury by implying that it was the government s money all along. Only unconditional tax cuts are worthy of the name. Some thinkers have wondered if the free market s bounty can become so commonplace that people forget what is required for its continuation.