BTW I live in Brazil, where we have big problems with both the tax rates and the byzantine complexity. Companies spend thousands of man-hours doing taxes.

Again, once you are in such a system, specializing in giving tax advice is a decent, honest way to make a living. But it's a bad system to begin with.

I think the article's point (maybe poorly expressed) is that having a bad tax system cripples the economy so much, that it has to be addressed in any serious effort to increase competitiveness. That's what can't be engineered around.

But that's not the way tech works. And that's not the way tax works either. If you are a small fry, the tax burden (or savings) will not be large enough to matter (because as a corporation, you get taxed on net income, i.e., profits). Affording a tax lawyer to "game" the tax system won't be necessary until you are at the scale where you are already pulling in serious profits.

Ultimately, people tend to vastly overestimate (or underestimate) the difficulty of activities outside of their profession.

I'm really surprised you'd then compare this situation to choosing between different available techs: it has nothing in common except "being hard". This is a legitimate expense from a natural consequence of invention: there are going to be several options with different trade-offs. You act as if Amazon is doing you a disservice by providing you with another option. Unlike the tax world, if there was a way to simplify this choice, everyone in the industry would immediately jump on board. You don't have to take my word for it, its the pattern we've been seeing from the beginning of technology. Making and scaling website today is vastly simpler than 10, 15, and 20 years ago. Can you say the same for taxes? Or have taxes become increasingly harder to deal with as time progresses? Many aspects of running a website that required experts yesterday are completely automated today.

In other words, the cost of "choosing a platform" is justified because there is no workaround and it is not an artificial position that you have been placed in. On the other hand, you have not proven that there is no alternative to a convoluted tax system that requires tax experts -- and furthermore it is not even clear what the benefits of a convoluted tax system even are. BTW, I am not taking a position on this, I am simply pointing out that that is the correct attack vector: explaining why this system that requires tax experts is necessary vs saying "Sure it is hard, but many other things are also hard."

EDIT: Added last sentence.

I think it very well might be. At least with how everyone actually utilize taxes. After all, government routinely utilize taxes (or rebates) as incentives to create desired outcomes.

You want more businesses moving into your area? Change the taxes. You want more home-owners? Change the taxes. You want more money for education? Change the taxes.

That's how you arrive at complex tax codes. It goes well beyond income taxes as well. You want a simple income tax? Fine, but I'm going to use sales taxes, road tolls, and a whole host of other mechanisms to get the desired behavior.

So it may not be an inherent property of taxes, but I'm not sure those things can ever really be separated.

Refactor refactor refactor. Sure, tech companies have the grand luxury of having fewer stakeholders to be accountable to, but surely it's possible to refactor, refine, and reduce the tax code every so often?

To drag the analogy further, the politicians are being engineers of the tax code when they should really be its product owners. Should politicians really be responsible for the minutiae of how many numbers to put where, or should they simply give higher-level directives, such as "incentivize alternative energy"?

I think as soon as taxes become a political tool, or a tool of public policy the question isn't whether they will become complicated but rather how complicated they will become. The floor here seems to me to be based on the willingness of the average voter to put up with the complexity vs the desire to see their public policy goals enacted.

I think that these play out in two ways:

1) Local taxes tend towards less complexity than taxes which are national.

2) Taxes which everyone reports tend towards less complexity than taxes which few people report. Consider the current trends in state sales tax reporting vs trends in state income tax reporting...... There's no question that sales tax reporting on average is more complex now than income tax on a state level, and that its becoming more complex faster.

Taxes are like C: a low-level language for effecting systemic policy. Under the U.S. Constitution, it is one of the primary vehicles through which Congress can enact national policy (the Commerce Clause generally being the other). If you do not need low-level access to the "hardware" of society, you use something other than taxes, but recognize that attempting national policy will be incredibly more complex and/or inefficient than using the proper "language."

In this sense, it is obvious why tax systems get more complicated: they take on more functions over time. This is the same reason that operating systems (also written in C) get larger and more complicated over time.

Also, the reason the US uses a deduction/credit system is that it is (politically) easier to balance credits and deductions (which effect fewer taxpayers) than to balance an alteration to the base rate that affects everyone.

Can you provide a source on that? I'd love to see a good list.

http://lmgtfy.com/?q=corporate+tax+rate+by+country

An outlandish claim regarding EFFECTIVE tax rate was made without any citations. Your snarky link does nothing to resolve the claim. A similar search for "effective corporate tax rate by country" also provides no evidence to defend rprasad's claim. Adventureful dug up quotes with sources fully debunking the claim in question.

I will try to help though: http://lmgtfy.com/?q=effective+tax+rate+by+country

The first link brings up this report (which shows the US effective tax rate towards the top): http://businessroundtable.org/uploads/studies-reports/downlo...

Is that the kind of info you're looking for? If not, maybe you could share the citations that you've dug up and enlighten the rest of us?

"The tax rate for the largest U.S. companies between 2006 and 2009 was 27.7 percent, compared with a non-U.S. average of 19.5 percent, according to the study released today. Companies based in Japan, Morocco, Italy, Indonesia and Germany faced higher tax rates. Excluding the U.S., companies based in industrialized countries had an average rate of 22.6 percent. "

"A March 31 report by the Congressional Research Service, using different methodology, found that the U.S. had an effective corporate tax rate of 27.1 percent in 2008. Other industrialized countries had an average 27.7 percent effective rate, using a weighted approach that adjusted for the size of the economy, and a 23.3 percent rate with an unweighted approach. "

The rest of the world has been competitively lowering corporate taxes (Sweden, once considered a socialist bastion, has a 26% corporate tax rate for example and is discussing lowering it to 20%).

http://blog.american.com/wp-content/uploads/2012/02/022212ha...

And what's very important is how much the bottom 97% of US firms pay, as companies like GE dodging billions in taxes massively skews the results for small businesses who can't dodge like that.

To be a small business in the US and get socked with a 40% combined income tax rate is paralyzing.