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You think that the legislature exists in a vacuum? That it writes out all these loopholes for fun? That other nations are just broken with their simpler tax cod

by rtpg 5y ago

You think that the legislature exists in a vacuum? That it writes out all these loopholes for fun? That other nations are just broken with their simpler tax code? This is yet another "American exceptionalism" thing where _somehow_ America is the only developped nation in the world with this level of issue yet seems to think it's sort of... intrinsic to the world. The most prescient thing I saw about the Panama Papers leaks was that the biggest reason so few americans were present in those is that America is basically already a tax haven for rich people. A flat income tax rate is not progressive by the usual definition, even with a flat deduction (imagine trying to scale _that_ to inflation and the endless debates). And we already have a solution for what you propose: gradual increase in the tax rate based on income levels! It has the added advantage of actually handling inflation (since the dollar amounts will go up over time anyways), and don't require a single "big tax number". If you believe what you say, just argue to remove various deductions and exceptions. We already have percentage-based tax system, there's no need to be that much cleverer.

anamexis 5y ago
> You think that the legislature exists in a vacuum? That it writes out all these loopholes for fun? That other nations are just broken with their simpler tax code? This is yet another "American exceptionalism" thing where _somehow_ America is the only developped nation in the world with this level of issue yet seems to think it's sort of... intrinsic to the world. I missed the part where they are suggesting any of these things. > If you believe what you say, just argue to remove various deductions and exemptions. That's exactly what they are arguing?
- rtpg 5y ago
  > where they are suggesting any of these things >> Of course this is fantasy; lobbyists for CPAs and for attorneys would never support anyone who voted for this kind of simplification. >> And, Congress would f* it up immediately by restarting the "let's use the tax code to reward our donors and punish our enemies" process. I think it's a bit defeatest to just say that it's just intrinsincly impossible for better things... but I'm maybe reading into those comments too harshly. They're arguing to rip out everything and replace it with a flat tax + a deduction. What I'm arguing instead is to do a line-by-line removal of exceptions and deductions, and don't try a "novel" flat tax (instead sticking to a tax with income brackets and different rates, that we _already have_), as it is a better system. And you get the advantage of the optics of "making the tax code simpler" rather than "replacing the tax code". A universe in which we just removed the number of IRS forms that exist is _roughly_ as good as the universe in which replaced all the forms with one form, except that removing the number of forms and still having a W2 would be much easier to migrate to, and doesn't involve nearly as much philosophical debate (even if the result is roughly equivalent). We don't need a novel solution here, we can just move more towards what other nations do (and where we are actually not that far from!)
  - anamexis 5y ago
    That's fine, there's plenty of reasonable debate to be had about specific policy reform, but OPs main point, to me, is how exactly do you intend to get Congress too enact it? Their campaigns are bankrolled by the people benefiting from the loopholes.
smsm42 5y ago
The reason it's so byzantine because taxation is control. The government wants to control your behavior, and when it's prohibited by law from doing it by threat of violence or coercion, it still can do it by employing the tax code. What happens if the court finds the government can't force people to buy health insurance? We declare it a tax on not-buying health insurance. What happens if the government wants to ban something, but is concerned the courts would find it overstepping its boundaries? Tax it until nobody can afford it. Want people to do something? Declare tax credit for it. Want to subsidize certain company? Issue them tax credits. Etc. etc. Nobody would be willing to give up such a versatile tool.

by rtpg 5y ago

anamexis 5y ago

> You think that the legislature exists in a vacuum? That it writes out all these loopholes for fun? That other nations are just broken with their simpler tax code? This is yet another "American exceptionalism" thing where _somehow_ America is the only developped nation in the world with this level of issue yet seems to think it's sort of... intrinsic to the world. I missed the part where they are suggesting any of these things. > If you believe what you say, just argue to remove various deductions and exemptions. That's exactly what they are arguing?

rtpg 5y ago
> where they are suggesting any of these things >> Of course this is fantasy; lobbyists for CPAs and for attorneys would never support anyone who voted for this kind of simplification. >> And, Congress would f* it up immediately by restarting the "let's use the tax code to reward our donors and punish our enemies" process. I think it's a bit defeatest to just say that it's just intrinsincly impossible for better things... but I'm maybe reading into those comments too harshly. They're arguing to rip out everything and replace it with a flat tax + a deduction. What I'm arguing instead is to do a line-by-line removal of exceptions and deductions, and don't try a "novel" flat tax (instead sticking to a tax with income brackets and different rates, that we _already have_), as it is a better system. And you get the advantage of the optics of "making the tax code simpler" rather than "replacing the tax code". A universe in which we just removed the number of IRS forms that exist is _roughly_ as good as the universe in which replaced all the forms with one form, except that removing the number of forms and still having a W2 would be much easier to migrate to, and doesn't involve nearly as much philosophical debate (even if the result is roughly equivalent). We don't need a novel solution here, we can just move more towards what other nations do (and where we are actually not that far from!)
- anamexis 5y ago
  That's fine, there's plenty of reasonable debate to be had about specific policy reform, but OPs main point, to me, is how exactly do you intend to get Congress too enact it? Their campaigns are bankrolled by the people benefiting from the loopholes.

smsm42 5y ago

The reason it's so byzantine because taxation is control. The government wants to control your behavior, and when it's prohibited by law from doing it by threat of violence or coercion, it still can do it by employing the tax code. What happens if the court finds the government can't force people to buy health insurance? We declare it a tax on not-buying health insurance. What happens if the government wants to ban something, but is concerned the courts would find it overstepping its boundaries? Tax it until nobody can afford it. Want people to do something? Declare tax credit for it. Want to subsidize certain company? Issue them tax credits. Etc. etc. Nobody would be willing to give up such a versatile tool.