Quick Observations On Taxes And The Social Welfare System

Some important provisions of the U.S. tax code that are substantively trying to do the right thing are just way too complex. Some examples:

* The taxation of tip income.

* The Earned Income Tax credit.

* The Obamacare tax credit for people who don't have employer provided health insurance, and the closely related taxation of health insurance for self-employed people

* Medicaid eligibility.

* Eligibility for other means tested programs like TANF, SNAP, and WIC.

* Public housing subsidies.

* The unemployment insurance system.

* The Social Security disability and SSI programs.

* The way that deductibles and co-pays and maximum coverage limits are handled with private health insurance.

Simple is better, for example:

* The standard deduction.

* The per child tax credit.

* Social Security retirement and survivors insurance programs.

* Medicare.

* HMO structures for most out-of-pocket health insurance expenses.

* India's right to show up to work and receive guaranteed paid employment.

* New Zealand's comprehensive no fault national insurance for all accidental injuries.

Accepting a certain amount of rough justice by making the bureaucracy of daily life for low income people simpler is well worth it, because this group of people is least capable of dealing effectively with paperwork and bureaucracy and complex rules. Reduced barriers to access and administrative costs can fund somewhat more generous benefits.

If you are going to have complex rules and bureaucratic systems they should be reserved for sophisticated, affluent individuals and entities.