One of the many problems with the tax system is that one man’s “important loophole” is another man’s “dishonest (but not illegal) abuse of the spirit of the law”. What’s needed is more careful drafting of tax law in order to avoid or eliminate these holes in the first place.
I’m a computer programmer — and what I do is write “laws” for the computer to obey. When I make a “loophole”, the computer may eventually “exploit” it and not do what I want it to do…perhaps a malware writer will exploit my loophole.
So what do I do about this? I debug my programs — I subject them to tests — I employ a QA department to look for those problems. I program “defensively” — I write software to check to see if a loophole has appeared and let me know about it. When I find a bug/loophole, I plug it — quickly and urgently. I try very hard not to let a version of my code with a bug in it loose on the general public.
Same thing needs to happen with the tax code. We need to have proposed laws added to a new “version” of the entire tax code — to have it be attacked by professionals who’s job it is to look for loopholes, inconsistencies, ways in which some small group of people might benefit or be harmed unreasonably and so forth.
Software engineers also do “regression testing” — where we test our new software against inputs that had been used with a previous version — to ensure that it behaves as intended. That would be a wonderful tool to have. “What happens if we throw last years tax returns into the proposed new version of the law?” — that’s something that could be done with a suitably large computer very rapidly.
Basically — writing laws is very, very similar to writing computer software — and the disciplines of the latter could be applied to the former to great benefit.
The problem here is that ‘amateur’ law makers are gluing small changes and additions onto this massively complex piece of law — hoping that they don’t break something in the process. Inevitably, they DO break it — and when they do, it causes big businesses to make ridiculous changes to their practices and structure in order to avoid taxation...and it takes decades to fix the law so it works again.