I don’t normally like a lot of Nicholas Beaudrot’s writings, but his post on Ezra Klein’s blog about the REAL issue with tax code simplification is amazingly insightful. :
Frustration with the complicated nature of the tax code is a reason to simplify the tax code, not to enact some crazy regressive tax scheme that would have the side effect of creating a massive informal market in untaxed goods. You could have an income tax that computed your tax liability based on a seventh degree polynomial that you could fill out on a post card, so long as the only input is “How much money did you make last year?”. Instead, our tax code asks you how much you made from working, which is treated differently from money earned from interest and dividends, which is treated differently from capital gains. And then we start asking how much you gave to charity, how much you spent on health care, how many kids you have, whether any of them are in college or require child care, whether you bought a hybrid car, etc. ad nauseum.