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.

You also get a deduction in America for taking a night school course, growing sugarcane, moving to a new city for a job, replanting a forest, insulating the attic, destroying old farm equipment, employing Native Americans, commuting to work by bicycle - but only if the bike is regularly used for a substantial portion of travel - or buying a plug-in hybrid sports car, or buying a recreational vehicle. I mean there are hundreds of them, and most of them are nuts.

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

Corporations use all sorts of complex stratagems to move their profits overseas, and thus escape the U.S. income tax.

Starting in the '80s or so, after the United States sharply cut its rates, other countries decided they better do it too, and here's how you do it: you just wipe out the exemptions, the deductions, the credits, the depreciation allowances. And people complain, "Oh my God, it's terrible," but you give them much lower rates and you give them an easier form to file, and people accept that tradeoff.

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.

Mortgage is one of the most popular deductions. It costs the Treasury about $103 billion a year. Now that's money we could use to treat wounded veterans or reduce the deficit or fill the border. Instead, we give it a subsidy to homeowners, and it goes mainly to the richest homeowners in America, because only one third of Americans itemize their deductions. It doesn't work. Many countries have gotten rid of the mortgage interest deduction. Almost all of them have higher homeownership rates than we do.