Simple Taxes

SIMPLE TAXES….I didn’t mean to give the impression yesterday that I’m opposed to tax simplification. It’s a great idea and Democrats ought to be in favor of it. But this from Ezra Klein seems wrong to me:

Additionally, tax simplification is the sort of policy which would make a great many people very happy at just about no extra cost to the government.

Somebody in comments should correct me if I’m off base about this, but my understanding is that the whole problem with tax simplification is that although it might make a great many people slightly happier, it inevitably makes a small number of people much angrier because they lose some loophole tax credit or other. And that small number of people will raise bloody hell about it.

That’s not to say it shouldn’t be done. But politically it’s harder than it looks, and the extent of simplification is limited in any case. If a straight salary is your only income, simplification is eminently possible (though we all still love all our deductions, don’t we?). If it’s not, then it’s not. Welcome to the 21st century.

POSTSCRIPT: I’d also like to offer up a rule of thumb similar to my warning that anyone whose main objection to national healthcare boils down to “hip replacements in Canada!” is not to be taken seriously. It’s this: any simplification proposal that touts a smaller number of tax brackets is likewise not to be taken seriously. The complexity of taxes has nothing to do with the number of brackets. It has to do with calculating your taxable income.

And a note to Ron Wyden: any “simple” version of the 1040 form that includes the phrase “see page x” over a dozen times is cheating. By that standard, the current 1040 form is “simple” too.