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Originally Posted by gcbrowni
We have a pretty simple progressive system now for individuals. The monkey wrech is the deductions. The Feds encourage and discourage certain behaviour by taxing it at different rates. This tweaking of the system is what adds the complexity to system, and is also its greatest strength. People tend to gravitate towards the things that make the most financial sense; the government recgnizes that and tries to push the nation in certain directions based upon that fact.
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I clearly agree with you against any form of VAT/Sales tax, for some of the same reasons you cite.
I have wrestled a great deal with the social engineering tools that taxes provide government. Personally, I am not opposed to social engineering; it can be a very good way to invest in improvements, and reward pro-social behavior, all of which I am not opposed to in the least. The problem is that as you mentioned, it is also a big problem, in that as the various tweaks have created a system so complex as to not serve the desired results at all, and increasingly create a situation that, despite all best intents, does not put the burden of taxation where desired.
Thus I have concluded that despite the easy nature of social engineering via the tax codes (from a legislative point of view), in the end, the purpose is often not achieved, and overall, the burden of taxation becomes highly imbalanced, and increasingly difficult to manage. Thus, while personally a fan of many social investments, I would prefer the government do them in a perhaps more legislatively difficult, but yet more stable, straightforward, and managable manner than through tax deductions.