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It's almost impossible to escape fair and simple taxation. Not worth the money even.
Loopholes exist because there's an entire industry of lawyers paid to exploit them and politicians create new ones to reward their allies all the time.
In a properly setup taxation scheme, there would be no need for the IRS. At best you'd only need a small legion of accountants to enforce a simple formula.
And that's just with 2000s technology. Nowadays if you actually wanted to implement a modern and efficient taxation scheme from scratch, you probably only need as many bureaucrats as DOGE has to operate it. Everything can be done on chain in a way that is both private and traceable.
And this is all the more absurd now that the point of taxation isn't even to fund USG but to take money out of circulation.
I suspect you aren’t a tax lawyer. To be fair, neither am I, but my guess is they’d laugh at your comment.
I certainly am not, though I'll have you know that I picked up these opinions in part from the long conversations I've had with my own tax lawyers.
I can assure you that the more complex the tax system, the easier it is to evade legally, provided you're rich enough. Meanwhile there's really not that much you can do to avoid paying a tariff, besides smuggling or fraud.
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You might be interested in my response down thread. It illustrates some of the complexity IGI-111 is likely unaware exists.
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Let’s say you own business asset A. You want to incorporate it for legal protection. Should you be taxed?
What if you transfer that asset (say it’s worth 10m) to Apple for shares?
This is hard for me to answer because I don't believe firms and the associated legal protections provided by the State are a good thing in the first place.
But assuming this is something that you want for yourself, you can very well setup a certification authority, register, and even assorted judicial system and let people opt into this.
States in the US compete on the quality of their chancery courts, I don't see why only States should have the right to establish such courts, moreover I don't see the need to subsidize such a service through taxation. Pay fees if you want to do quality business, and the incentives shall align. In what way is any of this the business of the State?
Tax exists for those services that can't be delegated to private society, for stuff that can only be done by the guy with the biggest stick. War, criminal justice and the like.
And to fund those, it seems entirely fair to me that it be extracted from either the people who benefit from the jurisdiction or the goods and services that traverse it. It just so happens that tariffs and sales taxes can easily be implemented without the need for vast bureaucracies or totalitarian records of everyone's economic activity.
And before I get accused of being a pie-in-the-sky anarchist, let me remind everyone not just that this is how some countries work today (including some pretty successful ones), this is also how most of the world used to operate before the Managerial Revolution ballooned state capacity. USA included.
If you really insist on having the apparatus to enforce an income and/or property tax, you can still have that without as giant a bureaucracy as the IRS. All you need to do is get rid of as many special rules as possible and just produce good valuation guidelines. Like the Swiss do.
It's amazing the economy of institutions you can make if you're willing to have simple rules and no exceptions.
I dont think any of this is responsive (eg we aren’t getting rid of corporate statutes). We have a federal income tax. You alienated property (call it BlackAcre). It was transferred to a wholly owned corporation. Should you have to pay tax on that alienated property?
The question isn’t “what is your ideal but what is your reality in the day today.”
The above simple question was answered by the government that it ought to be tax deferred (see Section 351). But that causes some complexity.
Another example is what if you and I enter into a partnership. How do we allocate the income from the partnership? What if we have shifting allocations as a business deal?
How do you tax non-US people who earn income in the US?
What do you if someone owns stock A and B. Stock A has BIG of 10 and Stock B has BIL of 10. You want to sell A but don’t want to pay tax. So you sell B. Then a day later you buy Stock B. Did you really crystallize that loss?
How about you receive income but it is subject to a claim of right. Do you have to report that income now or when the claim is settled? If now, what happens what that claim is settled?
I acknowledge that a lot of these problems are problems of an income tax (ie a sales taxes would probably be easier though has its own complexity). And for the vast majority of people who are W-2 holders the above is meaningless. And for the vast majority of those people, the complexity isn’t really a problem since the standard deduction has grown massively so most people take that.
But there are these problems and they are really important problems (big dollar amounts). Choice is required. While simplifying taxes is laudatory, there will be complexity provided you have an income tax.
Why?
I'm well aware it creates a ton of edge cases.
Seeing as all the complex questions arise from this complexity. My point is entirely that "simple" does mean a system where you don't have to maintain armies of mid-level bureaucrats to answer these questions.
Until 1913, the USA worked just fine without the XVI^th amendment.
Get rid of it then. Simple laws do solve fraud and government waste. You just care more for this bounty for bureaucrats than you do solving those problems apparently.
The only valid argument ever made for an income tax that isn't "we are at war" is that it would decrease income inequality, and if the past century hasn't demonstrated that to be tosh, nothing can.
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The Swiss actually do have a relatively large tax bureaucracy, especially if you drill down to the cantonal level.
As large as the IRS? Even proportionally that's not my understanding.
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