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Why does no one ever consider removing tax that doesn't make that much revenue? When I look at the tax code in the US half of it only applies to 0.0001% of peop
by kachapopopow 2y ago
Why does no one ever consider removing tax that doesn't make that much revenue? When I look at the tax code in the US half of it only applies to 0.0001% of people and the ones that affect the uber-rich have loopholes to avoid it. Why not just look at which tax is the most 'profitable' and remove the rest?
- noodlesUK 2y agoI agree conceptually with where you're going, but there are problems with this approach. If there's some situation where taxes are high, but almost nobody falls into that situation, you might find that upon removing the associated taxes, people will structure their affairs to fit the newly created hole in the tax code. Unfortunately, many complex systems are not created by any deliberate design, but by the accumulation of small decisions which often make sense at the time, but create something akin to horrifying tech debt over the course of decades. Everyone agrees that the current system is a monstrosity, but there are winners and losers in any attempt to simplify things. The winners might be happy, but the losers will kick up a huge fuss.
- NeoTar 2y agoPeople do consider it. But one of the issues with the tax system is that it’s not just a revenue generation mechanism. It is also used to encourage ‚good’ behaviours (e.g. saving for pensions) and discourage ‚bad’ (e.g. gambling). So, whenever you make a change to the tax system, you are not just changing revenue generation, you are also adopting a political position. Are you „hurting frugal savers” by removing their benefits, or „supporting gamblers” by removing their taxes.
- balderdash 2y agoI think many taxes are there to prevent behaviour/close loopholes e.g. the 10% penalty on early retirement account distributions or some of the pigovian taxes like the ones on plastic bags or taxes on tanning salons