| Let's list out a partial list of major US tax problems: 1. As we all know, tax preparation is intentionally complicated and hard thanks to lobbying by the tax preparation industry; 2. Access to the financial system should be a right. This article correctly points out there are ~6 million "unbanked" individuals. I haven't actually seen this problem in other developed countries. People will quite literally take their paycheck and cash it; 3. Also noted here: decades of Republicans starving the IRS (and pretty much everything else the government does bar the military of course). This creates a cycle where a starved government is then used as an argument to further starve the government. It's not surprising the Republicans are so incensed at last year's bill to fund the IRS and paint it as armed IRS officers coming and seizing your mobile home to try and rally support for it. It's the same reason the 15% minimum corporate tax was opposed even though the nominal corporate tax rate is 21%: to benefit the ultra-wealthy and corporations; 4. Deductions. Honestly pretty much everything should be gotten rid of for personal income other than maybe retirement saving. But there are simply way too many vested interests here for this to ever happen; 5. We need to annually tax unrealized capital gains; 6. Stop double taxing dividends. This leads to a lot of unnecessary complexity (eg passthrough corporation tax benefits). Dividend tax imputation is not hard; 7. Tax trusts as we do estates; 8. Tax land use based on assessed value, particularly for single-family houses. A $1 million house should pay higher property tax than a $1 million apartment. The US really is a dystopian hellscape. |
That ignores the lobbying by other industries for their favorite loopholes: mortgage interest, like kind exchanges, carried interest, R&D credits, and so on. Much of the complexity in the tax code is actually to close the loopholes that taxpayers are always finding, which has nothing to do with the tax prep industry.
> Deductions. Honestly pretty much everything should be gotten rid of for personal income other than maybe retirement saving.
This ignores the sizable impact of tax credits -- are you proposing those all eliminated also? Currently there is only a deferral of tax on qualified retirement savings, except for Roth IRA earnings (not contributions). There should also be tax free/deferred savings allowed for health care, so that it is not tied only to employment.
>We need to annually tax unrealized capital gains;
Even on someone's primary residence or other personal-use property? How do you determine fair market value? And it would only make sense if paired with annual deduction of unrealized capital losses.
>Tax trusts as we do estates;
This makes little sense. For income tax, trusts and estates are already taxed essentially the same. If you are referring to the estate/gift tax, the assets in a trust after death already go through the estate tax regime, why would you do it twice?