The income tax maze

If you could design an ideal income tax system, what would it look like? ("None" is not an acceptable answer).  Progressive, probably, if your politics lean to the left; flat rate, if to the right.  All types of income treated the same, if your politics lean to the left; special treatment for investment income and capital gains, if to the right. But regardless of your politics, you'd probably want to keep the system simple and transparent, and make it as hard as possible for people to avoid paying their due.

So how on earth did Canada end up with the system it currently has?  Income is taxed at different rates by the Federal Government and each of the provinces, with different exemptions and thresholds.  The array of possible deductions and wheezes is growing exponentially by the year.  Let's just take a look at some of the items in the 2014 Federal tax return as applied in the Province of Ontario.  Note that I'm not saying that all of these are unreasonable, but there are just so damn many that it's all but impossible to know whether the system is fair any more.  

There's a "disability supports deduction", but there's also an "infirm dependants amount" and a "caregiver/disability" amount.  There's a "Canadian forces police deduction" and one for "volunteers (firefighters/rescue)".  You can claim deductions for security options, physical and artistic activities and public transit passes.  You can get tax credits for making contributions to a political party, or to something called a labour-sponsored fund.  If your employer helps with your moving expenses, that's taxable, but if you receive a loan to help you relocate, the interest payments are deductible.

And so on, and on.  The origins of some of these things are lost in the mists of time (I wouldn't be surprised if "labour-sponsored funds" are mentioned in the Old Testament), but others are of much more recent vintage. The current Tory government is particularly fond of targeted tax relief aimed at shoring up its core voter base, but to be fair that doesn't really differentiate them at all from their predecessors.

Tax reform and simplification is long overdue, but each of these targeted deductions and credits and what all else has built up its own little constituency over time.  There'd be hell to pay for any party that proposed throwing the whole lot onto the bonfire, so in all likelihood the system will just keep getting more and more complicated, further and further removed from the ideals of fairness and simplicity.