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Tax Code 2.0: Is Extreme Complexity the New Simplicity?

Posted on January 18, 2013

When was the last time you used Google’s search engine? Were the results more or less relevant than the searches you did a year ago?

Early on, after Google had developed its breakthrough search algorithms, they realized the Internet was a very fluid environment that would require constant monitoring and continuous changes to keep the people who were gaming the system at bay.

Currently Google is making changes to its main search algorithm roughly 40-50 times a month or slightly more than once a day. As the web evolves, this number will undoubtedly increase.

Now consider the possibility of a country using the same type of constantly evolving algorithms to determine its tax code.

Countries have similar problems with people trying to game the system to avoid paying taxes, so what if the IRS, or its equivalent in other countries, made similar algorithm adjustments to constantly close loopholes and determine the appropriate tax rate?

In case you’re thinking this is a ridiculous idea, the IRS is already making changes to the tax code at a rate of more than once a day – 4,680 changes since 2001.

But rather than thinking in terms of an income tax that is only filed once a year, what if it were applied to a national sales tax where literally billions of purchase transactions happen every day. Here are some thoughts on why this may or may not be a better way to go.

“Here in the U.S. we dedicate far too many brain cells to thinking about taxes!”

Read more: Tax Code 2.0: Is Extreme Complexity the New Simplicity? | World Future Society.

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