I'd argue that complexity is what causes loopholes, rather than the other way around. Things like tax credits aren't 'loopholes' - they're specifically codified

I'd argue that complexity is what causes loopholes, rather than the other way around. Things like tax credits aren't 'loopholes' - they're specifically codified in the law for people to utilize, in an attempt to encourage certain behaviors. It's not gamesmanship, although there is some competitiveness between state tax laws (such as this WA vs CA capital gains thing). That's WA's incentive to get people with lots of money to come live (and hopefully spend) it in WA. CA has enough people with lots of money that it can afford to take a different stance.