Our Loophole Culture

The United States federal tax code is 6,871 pages long. The regulations that codify the official interpretation of that tax code multiply that tally by eleven, meaning that there are 75,000 pages of stuff that you or your accountant or your tax return software must know and understand in order to accurately sort out your tax liability. To the Feds alone.

The House Republicans just advanced Trump's "big, beautiful bill" that includes the making permanent (until Congress changes it again) of the tax rate cuts that passed during his first term. It includes some new tax breaks, including no tax on tips and no tax on overtime, and an increase in the amount of state and local taxes that can be deducted from one's federal tax bill. It also includes a long list of other carveouts, deductibles, credits, and actual giveaways. Some permanent. Some temporary, which means they will become expected and fought about when they sunset.

Nigh-on 30 years ago, Steve Forbes, publisher and businessman, ran for the Republican Party nomination for President with a flat tax proposal as his primary - and per some commentators his single - issue. The flat tax would have massively simplified the tax code, liberating Americans from hundreds of billions in compliance costs. In inflation-adjusted dollars, that cost was approximately $120B in 1996, and $546B last year. Clearly, Forbes and his idea went nowhere, and even the notion of simplifying the tax code produced no fruit.