The tax laws are written by what we call Congress the legislative branch of our government. The people in Congress get elected by the citizens. To get elected to Congress costs a lot of money, because campaigning isn’t cheap. So they have to raise money to get elected. The money they raise comes from people who want Congress to do something for them. These people hire other people called “lobbyists” who bribe members of Congress with campaign funds. Well, we don’t call it a “bribe” even though that’s what it is, because it makes it sound unethical and dirty. It is unethical and dirty, but we all pretend that the money given to politicians has nothing to do with the way they vote on tax issues, for instance. I’m not sure why everyone pretends in this fashion, but we all do, for the most part.
Say you are a company that builds widgets. You join together with other widget-makers, and form a business group. You all pay money to this group, and the group takes that money and gives it to a bunch of lobbyists. These lobbyists take the money, and bribe as many members of Congress as possible. Then when the tax laws are drawn up, the politicians which you have bribed write into the tax code “widget makers don’t have to pay taxes.” Of course, this would be too obvious, so the way this gets written into the tax code takes eight hundred words of closely-packed text which never even mentions the word “widget” but defines the tax break in such a way that the only people who can claim it are you and your fellow widget-makers. Nobody else even notices those eight hundred words, so they don’t complain about you getting such a sweet deal.
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