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Why not ask the question why taxes are so complicated? Ted Cruz advocated for post card tax filing but everyone hated it because it would have eliminated the wi

Why not ask the question why taxes are so complicated? Ted Cruz advocated for post card tax filing but everyone hated it because it would have eliminated the winners-and-losers picking that the tax code gives politicians. According to Ted Cruz, 9 billion hours is spent on tax compliance each year. Milton Friedman has a lot to say on the intentional complication of the tax code: https://m.youtube.com/watch?v=TruCIPy79w8 https://m.youtube.com/watch?v=TruCIPy79w8 Tax rates should be low, deductions minimal, and compliance easy. The Laffer Curve demonstrates this value to government revenues. But the economic literacy of most people is so lacking that it always revolves into some kind of class-warfare debate. Tangential, but related would be the UBI debate vs. welfare program. Whatever side of the aisle you’re in when it comes to spending priorities, one thing that should be obvious is that simplification is a win for everyone except those with robust lobbying resources to fight for carve-outs. We could spend more money with simpler, lower taxes that are applied evenly. Have a high standard deduction to protect the very poor and for every dollar over that, the government gets 10%. Simple. But the compliance industry would lose their minds. This “progressive” tax system we have is ridiculous because it isn’t progressive at all — those making money from capital gains pay less than wage-earners. Everyone should pay the same percentage regardless of the origin of funds.

dragonwriter 5y ago
> Ted Cruz advocated for post card tax filing but everyone hated it because it would have eliminated the winners-and-losers picking that the tax code gives politicians. No, it wouldn't. Like every tax proposal, it was winners-and-losers picking, not an elimination of it. People opposed it because they didn’t like the winners and losers Cruz picked.
tialaramex 5y ago
> The Laffer Curve demonstrates this value to government revenues. No. The Laffer Curve says that if humans were rational - which they aren't - and if tax enforcement is 100% effective - which it isn't - then the expected revenue is zero at both 0% taxation and 100% taxation. That's all it says. Every other point on the "curve" is arbitrary, and in practice Laffer uses this worthless conjecture about a hypothetical world that doesn't exist to justify cutting taxes on the rich, saying it will result in higher revenues. It doesn't of course, but as someone who benefits why should he care?
fattire 5y ago
NPR asked why taxes are so complicated. Ted might want to have a chat with his libertarian friends at Americans for Tax Reform (Grover Norquist). https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis...

dragonwriter 5y ago

> Ted Cruz advocated for post card tax filing but everyone hated it because it would have eliminated the winners-and-losers picking that the tax code gives politicians. No, it wouldn't. Like every tax proposal, it was winners-and-losers picking, not an elimination of it. People opposed it because they didn’t like the winners and losers Cruz picked.

tialaramex 5y ago

> The Laffer Curve demonstrates this value to government revenues. No. The Laffer Curve says that if humans were rational - which they aren't - and if tax enforcement is 100% effective - which it isn't - then the expected revenue is zero at both 0% taxation and 100% taxation. That's all it says. Every other point on the "curve" is arbitrary, and in practice Laffer uses this worthless conjecture about a hypothetical world that doesn't exist to justify cutting taxes on the rich, saying it will result in higher revenues. It doesn't of course, but as someone who benefits why should he care?

fattire 5y ago

NPR asked why taxes are so complicated. Ted might want to have a chat with his libertarian friends at Americans for Tax Reform (Grover Norquist). https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis...