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To have a tax sytem with no loopholes would almost certainly require having no credits or deductions. I actually think there's something to that idea, but polit
by Analemma_ 1y ago
To have a tax sytem with no loopholes would almost certainly require having no credits or deductions. I actually think there's something to that idea, but politically it's an absolute non-starter: taxpayers love the credits and deductions they have now and don't want to give them up, and governments love using them to shape policy and don't want to give up that particular tool in the toolchest.
- alpinisme 1y agoOne of the quirks of the current system is that subsidies are pitched as decreases to what one owes in taxes. There would be more transparency (but more overhead) if everyone paid full sticker price for taxes and then the govt separately gave money to the groups whose behaviors it wanted to encourage or whose challenges it wanted to help with (or fined the ones whose behaviors it wanted to discourage). This would not be feasible either politically. But it would bring transparency and clarity.
- BenjiWiebe 1y agoOne way the government wins with the current method is when the non-refundable tax credit is greater than the amount you owe in taxes.