The U.S. has the most complicated and difficult tax system in the world; we've made it hard to file and pay taxes.

If you ask any economist, they'll tell you all the mortgage interest deduction does is raise the price of the house. So a couple is out looking at the house, they say, "Oh, we love this house, but we couldn't make the monthly payment." And the realtor says, "Yeah, but you're going to get a tax break." So people pay more than they would otherwise. You take a loss even though you're making a gain.

If your employer pays your health insurance, that's not counted as income to you. And any economist would say that's your income, because they'd pay a higher wage if they didn't take it. That's a huge loss to the Treasury.

Americans spend about 6 billion hours a year collecting the data and filling out the forms. We spend $10 billion to H&R Block and other preparers. And on top of that, $2 billion in tax preparation software, which still takes hours of work. It's outrageous the burden we put on people, and guess what, you go to Europe, you go to Japan, it's 15 minutes and costs nothing.

Relative to the world's other advance democracies, Americans get off easy on tax day. Of the 35 richest countries, the U.S. ranks 32nd in total tax burden.

If you get rid of all these giveaways and loopholes and deductions and credits, then you can sharply lower the rates.

Professor Eric Zolt of UCLA, said to me, "The VAT is such a good idea, mark my words, within five years, the U.S. will have a VAT." Then he said, "Of course, I've been saying that for 20 years."