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AnthonyMouse • today at 5:31 AM • 0 replies • view on HN

> They don't do this in this country because (a) it's a political project to make people to sympathize with the rich by feeling their pain (b) it's a great scheme for legalized corruption by creating incentives to build companies around a fake problem.

It's worse than that. Nobody is actually sympathizing with Mark Zuckerberg, the reason US taxes are complicated is so Congress can confuse people about how they really work.

One of the examples in this thread is the complexity of the EITC. The EITC is one of the most "efficient" tax credits -- it's much better to give people money (or not take it from them to begin with) than having systems of complicated vouchers for some specific thing or another with a bunch of strings attached and bureaucratic paperwork. But that same efficiency means that if it was working as it was supposed do, most of the lower middle class would be getting a piece of it. So why is it so complicated?

First, to hide this part of it: The end of the phase out range for an individual with no dependents, i.e. the most money they can make and still receive it, is $19,540. Which is to say, is less than what you make by working a full time job at the minimum wage in 30 states. None of those people get any of it. Neither do the people who are unemployed, because you also don't get it if you don't have any earned income. The primary way to receive any of it is to have a child -- but not too many of them, because you get no additional credit for having more than three. Moreover, the caps for married couples are only a little higher than they are for single people, so a married couple in California with two incomes gets nothing even if they have three children because the credit is fully phased out by making their state's minimum wage.

And second, because if they make it complicated enough then even some of the people who are eligible for it won't notice.

The combination of these is the reason a credit that should be going to a significant percentage of the population is somehow only ~1% of the federal budget. Because then Congress gets to pretend to be helping people while minimizing the amount of helping people they actually do.