The “simplicity” argument for fewer brackets is flawed on its own terms. Figuring out what bracket your income falls into takes five minutes of paperwork and some high school arithmetic. The crushing complexity of the tax code comes before that step, when you have to actually define your income — that’s when the avalanche of loopholes, deductions, credits, and carve-outs piles atop you. Brackets aren’t the problem. Indeed, as Chang showed with a very slick interactive graphic, for the vast majority of the 20th century, the U.S. income tax code featured way more brackets than it does now.
Source: The case for more tax brackets
There are a lot of improvements waiting to be made in our national tax structure but as the source above says reducing tax brackets should be a very low priority in the work. The loop holes put into the structure over the years needs immediate changes. It’s time to throw them all out and start over again and only add them back with a lot of restraint! It is a simple as that… But, how to accomplish that is the gargantuan problem especially with a gridlocked congress and all the special interest groups tugging at them.
Obviously from the graph above the largest portion of loopholes have been carved out for the wealthiest among us. I would like to see this graph continued through 2015. I’m sure that the top 1% are now getting a much greater share than they even did in 2008. That must be so since the middle class is getting less and less. I think I read somewhere that the 1% are not approaching 50% of the total income.
It is interesting to see that the accumulated wealth of the top 1% is now greater than it was just prior to the Great Depression of 1929. I wonder if this is a harbinger of things to come?
I know there are a variety of different approaches to simplifying our tax code. I just hope that whoever finally manages to accomplish this gargantuan feat has the wisdom to do it correctly and to not put in increased burden on those who are struggling the most.