Is It a Viable System?

In the aftermath of everybody's favorite day, April 15, while a bit testy about the income tax system, onerous recordkeeping requirements, difficult codes and mounds of paper, not to mention the money itself, all combine to make "tax day" fairly painful. The question comes as to whether it has long-term viability. Indeed, Mr. Frey suggests income tax system as we now know it may not even have mid-range feasibility. These articles by Thomas Frey underscore the problem from the perspective of complexity and simple engineering.
The exponential nature of complexity

Posted 04.10.2009
Why the income tax system will collapse
By Thomas Frey

It can be argued that all major civilizations have collapsed under the weight of unsustainable levels of complexity. In major civilizations such as the Egyptian, Greek or Roman empires, as well as in smaller civilizations like the Mayan Indians and Mesopotamia, each had reached a point where an all-powerful bureaucracy building an ever increasing number of rules simply overloaded the administrator's ability to comply with them, and the systems collapsed.

As complexity increases, the cost of managing the complexity increases at an exponential rate until the system finally collapses.
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A tax system Armageddon is near
Posted 04.07.2009
In the future, the U.S. tax code will be an example of what not to do
By Thomas Frey

In the movie "The Day After Tomorrow," survivors stranded in a library are easily persuaded to burn the multi-volume IRS Tax Code to stay warm. In this fictional scenario, the question one might ask is: Why did we wait until the end of the world?

In 2003, I wrote a paper titled "The Coming Collapse of Income Tax," in which I predicted that our current income tax system would collapse within 10 years. My prediction stands, even as the deadline nears. I am still firmly convinced the collapse is near.

Tax expert Calvin Johnson testified before the U.S. Government Affairs Committee in 2003 taking to task the relationships of public accountants and the tax shelter industry. Johnson, a law professor at the University of Texas at Austin told the Senate panel that writing "tax shelters has done real damage to the tax system and allowed many taxpayers who should pay income taxes of 35 percent to pay 10 percent." The tax base has eroded as a consequence, he noted.

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