Tax Complexity: A Sine Qua None for Tax Fairness

39 Pages Posted: 4 Apr 2015

See all articles by Zach Pouga

Zach Pouga

EY - Tax Partner; Michigan Law School

Date Written: May 2013


Taxation for every country is more than just an expression of a country’s sovereignty; it is a condition of each country’s existence and ability to meet its most basic responsibilities to its people. From inception of tax systems throughout the world, only complaints about tax complexity have grown as fast as complexity of the tax systems themselves. The debate over tax simplicity and Tax complexity has long occupied tax practitioners and tax policy aficionados. Some have argued that tax simplicity, meaning simple tax systems, should be the only guiding principle for tax policy makers throughout the world. Others, going even 2 500 years back (with the biblical tithing); have taken their argument to the extreme by claiming that no tax system can be simple. The tendency however, at least in theory, is a convergence between most in this debate to agree that tax simplicity is more advantageous. Some arguments put forward include the easy compliance, more participation, less transaction costs. These arguments are true facts and known to everyone but they do not carry the day. Known advantages of simplicity in tax seem paradoxical with the ever growing complexity of tax systems. Complexity has grown so exponentially throughout the world that it seems fair to ask, after Blaufus and Ortlied: “Is Simple Better”? Why is it that tax complexity keeps thriving? Why is it that tax systems throughout the world are becoming more and more complex? Why is it that whatever the form of taxation considered, whether direct or indirect, whether local or global, complexity seems to be the common trend of tax systems worldwide?

As recognized by many including former senator Russell Long, tax complexity is “there in the effort to do more perfect justice”. Though arguments of tax simplicity are legitimate, they do not consider and weight the main raison why Tax Complexity is a necessity. This essay intends to show that tax fairness can only be achieved through “complexified” tax systems. Tax complexity is thus a sine qua none, a condition without which there would be no fairness in tax. To acknowledge the legitimate arguments put forward by proponents of tax simplicity, we recognize that we all would like to have simple tax systems, easy to comply with and easy to administer. However, if these advantages can only be obtained through sacrificing fairness, then we should not pursue simplicity. In fact, if the cost of simplicity is fairness, if the results of simplicity are unfair, if the choice is between simplicity and fairness, then there is no place for simplicity in modern tax systems where the need for fairness is forever more pressing.

This essay demonstrates that tax complexity is necessary for tax fairness through analysis of tax systems throughout the world. We will analyze how complexity achieves fairness in direct tax systems such as the United States on the one hand, and how complexity achieves tax fairness in indirect, consumption based tax systems such as Cameroon or France on the other hand.

Keywords: Tax, Taxation, Fairness, Tax Fairness, Tax Simplicity, Tax Complexity, Direct Tax, Indirect Tax, Tax Incentives,Tax efficiency, Tax Policy, Progressive Tax, Regressive Tax, VAT, Sales Tax, Presumptive Taxes, Tax Deductions

Suggested Citation

Pouga Tinhaga, Zachee, Tax Complexity: A Sine Qua None for Tax Fairness (May 2013). Available at SSRN: or

Zachee Pouga Tinhaga (Contact Author)

EY - Tax Partner ( email )

United States

Michigan Law School ( email )

625 State
Ann Arbor, MI MI 48109
United States

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