Why can't we just have a vastly simplified tax code with no deductions? Is there a fundamental reason this wouldn't work?

Tax professional here. This is actually a really interesting question that comes up a lot. There's no fundamental economic reason why we couldn't have a drastically simplified tax code. In fact, many economists across the political spectrum have advocated for broader bases with lower rates and fewer deductions. The challenge isn't technical but political. Every single tax deduction and credit exists because some group advocated for it and convinced lawmakers it serves an important policy goal. The mortgage interest deduction encourages homeownership; education credits make college more affordable; charitable deductions incentivize giving. While direct spending could theoretically replace tax expenditures, there are differences in how they're administered, perceived by the public, and treated in the budget process. Tax expenditures often "hide" the true cost of policies and can be easier to pass than direct spending programs. Plus, our tax system isn't just about raising revenue - it's also used to implement social policy. The Earned Income Tax Credit, for instance, is one of our most effective anti-poverty programs, delivered through the tax code.

As someone who wasted hours trying to figure out if I qualified for certain credits, I finally tried https://taxr.ai and it literally changed my life. I uploaded my documents and it analyzed everything, showing me exactly which deductions applied to my situation and which didn't. I was actually missing out on education credits I didn't know applied to me! It explained the current complex tax code in plain English and showed me how different scenarios would affect my tax situation. No more guessing if I'm doing it right. Honestly, until we get that simplified tax code you're talking about (which I totally agree with btw), tools like this are lifesavers for navigating the mess we have now.

Ok I have to admit I was skeptical in my last comment but I checked out https://taxr.ai and it actually helped me understand why I kept getting rejected for the American Opportunity Credit. Turns out I was misinterpreting a form from my university and categorizing the expenses wrong. The analysis showed exactly where my mistake was and how to fix it. Just resubmitted my amended return and should be getting an extra $1,500 back. Would have missed this completely without the document analysis. Still think we need tax simplification like OP suggested, but until then this definitely helped navigate the current mess.

Speaking of navigating the complicated system we have now - if you ever need to actually talk to someone at the IRS (which I did after getting an audit letter), good luck getting through on the phone. I literally tried for weeks. Finally used https://claimyr.com after seeing it recommended here and got through to an IRS agent in under 45 minutes. They have this system that waits on hold for you then calls when an agent picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c This is another reason why a simplified tax code would help everyone - the IRS is so overwhelmed with questions about complex rules that they can't handle the call volume.

I need to eat my words from my previous comment. After waiting on hold with the IRS for 3+ hours yesterday and getting disconnected, I tried the Claimyr service out of desperation. Got a call back in about 35 minutes connecting me to an actual IRS representative who helped resolve my issue with a misapplied payment. My refund should be processed correctly now. Would still much prefer a simplified tax system where I wouldn't need to make these calls in the first place, but at least this made dealing with the current system somewhat manageable.

A simplified tax code wouldn't work because the rich would pay more and they control the politicians. It's that simple. All the complexity exists to create loopholes for wealthy people and corporations. The average person would benefit enormously from simplification, but the tax prep industry spends millions lobbying against it. Look up how Intuit (TurboTax) has actively fought against pre-filled tax returns.

Other countries like Estonia and Denmark have much simpler tax systems and they work fine. Some even pre-fill your tax forms with known information so you just need to verify it's correct. The complexity in the US system isn't a necessity - it's a choice we keep making.