But tax expenditures are the only way for anti-government types in government to spend money! ;-)
The complexity doesn't come from the simple cases: it comes from the cases that are legitimately complex. Carried interest, investment gains, charitable contributions, foreign income, corporate debt and so forth aren't reducible to a simple equation. For the vast majority of Americans taxes are simple: for many of the rest, they will never be simple unless they are abolished all together.
Carried (really, any) interest: income.
Investment gains: income.
Charitable contributions: good for you.
Foreign income, less taxes paid upon repatriation: income.
House purchase: congratulations.
The tax code is complex because it gives the government power over us, because there is a huge industry built around it and because rich people can use it to their advantage.
Agreed except for foreign income: we have treaties with most countries to avoid double taxation: If I've paid taxes to Turkey for money earned in Turkey, why do I pay it again in the US?
Now, things get more complicated with foreign investments. If you've paid taxes on the investment in Ireland, you've likely paid less than you would in the US -- so that doesn't quite work. That's where things get complicated.
should all work like multi-state commuter taxes--i live in NJ, work in NY, and my NY tax is credited against my NJ liability (leaving no liability to NJ, as NY rates are higher (at least with the extra NYC tax thrown in)). tax treaties (as exist between many states) just make the revenue sharing easier from the governments' point of view.
The complexity doesn't come from the simple cases: it comes from the cases that are legitimately complex. Carried interest, investment gains, charitable contributions, foreign income, corporate debt and so forth aren't reducible to a simple equation. For the vast majority of Americans taxes are simple: for many of the rest, they will never be simple unless they are abolished all together.