What would be the best tax system for simplifying complex taxation and addressing income inequality?

While I understand the appeal of simplifying taxes down to just income tax, there are several practical issues that would make this challenging to implement effectively. First, consumption taxes (like sales tax or VAT) serve an important purpose in capturing revenue from transactions that might otherwise escape income taxation. For example, tourists and visitors contribute through consumption taxes but wouldn't pay income tax. Similarly, those with unreported income at least contribute when spending money. Second, behavior-based taxes serve distinct policy goals beyond just revenue generation. Taxes on cigarettes, alcohol, carbon emissions, etc. are designed to discourage certain activities and account for externalities. Income tax can't accomplish this targeted approach. Third, the tax burden would shift dramatically. Currently, corporate taxes, property taxes, and consumption taxes spread the burden across different entities and behaviors. Shifting everything to income would place enormous pressure on wage earners while potentially allowing other sources of wealth to escape taxation. A more practical approach might be to simplify the existing systems rather than moving to income-only taxation. Reducing exemptions, standardizing definitions, and improving technological integration between tax systems would provide many of the transparency and efficiency benefits without the dramatic downsides.

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Adding to the discussion on income-only taxation - one major issue not considered is wealth inequality. Income tax only targets active earnings, but much of the wealth held by the ultra-rich isn't in regular income but in appreciating assets like stocks, real estate, etc. This is why many economists argue for some form of wealth taxation alongside income taxes. If we eliminated property taxes, capital gains taxes, etc., we'd basically be giving a permanent tax holiday to those who live primarily off assets rather than wages. Also, consumption taxes can actually be beneficial for economic stability because they provide a more consistent revenue stream during recessions when incomes might fall dramatically. No perfect system exists, but a balanced approach with simplified versions of different tax types probably makes more sense than going all-in on just income taxation.

Having lived in 6 different countries, I've experienced many tax systems firsthand. The simplest wasn't necessarily the best. In Singapore, they have very straightforward taxes, but it created other societal issues. In the Nordic countries, taxes are high but extremely transparent in how they're calculated and spent. The problem with income-only taxation is it misses huge parts of economic activity. For example, tourism: visitors consume resources but would pay zero under income-only systems. One approach I liked was in New Zealand, where they have a fairly simple GST (goods and services tax) applied broadly with very few exemptions, combined with a progressive income tax. The simplicity wasn't from having just one tax, but from having few exemptions and very clear rules.