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gattsuru comments on Free to Optimize - Less Wrong

25 Post author: Eliezer_Yudkowsky 02 January 2009 01:41AM

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Comment author: gattsuru 02 December 2013 07:51:33AM *  0 points [-]

A list of important deductions, such as charitable donation and capital loss

I expect (> 0.99) that any politically achievable set of important deductions will exceed a page, and predict (> 0.8) that any set of tax structures that you'd actually like to live within will greatly exceed several dozen pages. The Earned Income Tax Credit, for one simple and exceptionally popular example, is several pages on its own.

More fundamentally, how do you define income? Do you allow corporations to exist at all -- not every country does -- and if you do allow them, do you tax them -- not every country does -- and if you tax them, when and to what degree?

Part of this is legal formalism. In the same way that you have to write a whole lot to handle general circumstances with programming code, even for relatively simple programs, any just legal system will need to describe as much of the situation as possible. ((If you don't do it in the statute, it just falls into the court and regulatory system: arguably, the worst complexity in the US system already does this!)). Most victims of the IRS don't need to think about whether the gift boat counts as income, just as most viewers on this web site don't need to think about whether they handle decimal commas or sanitizes input, but if it's not in the statute or code, respectively, things end poorly.

There's a lot of cruft that could be removed even under that, true. Many of these statutes are the legal equivalent of code projects that have accumulated, rather than being designed-as-a-whole. The problem is that the beneficiaries of any particular deduction care very strongly about their particular deduction, while tax-simplifiers care very strongly about a random deduction,