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Comment by jxramos | Hacker News Reader

> Second, Tainter proposes a very simple and general mechanism leading to collapse: declining marginal returns to complexity. Over time the benefits of complexity diminish and its costs increase.

This makes me think of the US Federal Tax code, the pure opportunity cost of the entire tax industry and legislation that could be otherwise spent if we just had a flat tax with it's full regressiveness accepted. Any charity, favoratism, etc from the government should come in the form of grants etc from some other agency--keep the taxes simple.

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If you are arguing for a flat tax, then simplicity is not enoigh to make up for the obvious downsides. Particulalry as fixing them isnt conplicated.

If you're arguing for simpler tax systems, which I think I agree with, mentioning flat tax ideas in the same post is only going to put people off the idea, and see it as a scam to reduce taxes on the wealthy and undermine democracy.

> and see it as a scam to reduce taxes on the wealthy and undermine democracy.

While the wealthy do pay the majority of taxes - there's a shocking number of absurdly wealthy people with low tax rates (their overall tax bills are still eye watering to a normal pleb).

So it's hard to argue for a flat tax without noting that it will lower the average wealthy person's tax bill considerably. At the same time, most people who argue for a flat tax think it will actually increase wealthy people's taxes!

Most people are aware that the rich "cheat their taxes". They aren't aware that the vast majority of them are still paying above median tax rates.

There's no way around it. The tax bill, currently, is heavily footed by the wealthy. If you go to a "flat tax" it's going to reduce taxes on the wealthy and increase them on the majority.

> So it's hard to argue for a flat tax without noting that it will lower the average wealthy person's tax bill considerably.

It's also hard because that is basically the only real reason anyone has every argued for it.

Lots of ways to 'simplify' taxes that would actually tax the rich without raising tax rates:

https://blogs.lse.ac.uk/businessreview/2020/06/15/raising-mo...

The UK and the US differ dramatically in their use of the tax code to create behavioral and economic incentives. Most of the complexity in the US tax code stems from the government's repeated, endless use of "tax breaks" (credits, deductions and more) to encourage various things, whereas most other governments dispense money to people who participate in whatever is supposed to be encouraged. In theory the effects are similar; in reality, the implications are wildly different.

There should be some mechanism that measures the existing inequality and automatically adjusts tax progressiveness so to keep inequality at some constant level.

So, real question, why does the tax code need to be -that- simple? Like, we've got computers and stuff to do the math these days? It sounds like an easy way to say that one is for 'a simple, common sense solution' while papering over the very real harm it's going to do to at-risk and impoverished communities.

To contribute, why should those communities that a flat tax harms be forced to bear that weight of simplification?

It looks like you'd be ignoring the reviewer's second point: that the other factor in societal collapse is when those portions of society that bear undue weight no longer can bear additional burdens.

I’d say when it’s that simple there’s nothing to argue with and no major brain power demanded, let alone a computer program needed to crunch the numbers and optimize in some highly complicated multidimensional space. There’d be no competing interpretations to battle out between lawyers and CPAs. The only thing that would be argued about is at what tax rate.

I’ve often dreamed about what the tax formula would look like in its full gory details as an unevaluated expression full of variables and piece wise functions and all that.

To the second point I’d say why wait until collapse to trim off unproductive regulatory churn. I guess that’s the fundamental thing—is it a productive pursuit on net and compared to what exactly. It’s hard for me not to imagine the free market filling the void with something more productive even though I can’t single out anything specifically.

How can you just have a "flat tax" if you pay employees, or have inventory costs? You need deductions so you need to track everything anyway. That is the hard part.

So having a flat tax or not barely saves any complexity at all.

Adding a simple floor to the tax rate would solve much of the regressiveness. Nobody would pay taxes on their first $40k (or whatever number works), and then a flat rate above that. The floor could even be done as a prebate to gain some social safety net benefits. Every citizen is given $tax_rate * $40k every year, doled out as monthly payments, and pays a flat tax rate on all income.

We could retain a progressive tax system with or without the use of tax incentives. I would personally favor the removal of all tax incentives to be replaced as your suggest with grants, but would combine that with a continuously valued formula for tax rather than tax brackets. It's very simple, except that most people don't understand "equations".

This reminds me of a commentary on the new megalaw - the Inflation Reduction Act - that it succeeded (got passed) because it wielded carrots rather than sticks.

This approach is compatible with your idea - to keep the tax side of the budget super simple, and put all the incentives and giveaways in the grants side (fairly transparently).

Property values on K Street would drop :-D

Yah I imagine they would. What other productive industries could replace them I wonder.

Bodegas! Bodegas! Bodegas! :)

Sure the lobbying industry has a large presence in DC, but that's an interesting question - what else fuels the DC economy ?

land value tax.

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