It's basically a fact that all forms of taxation cause problems and they interact with each other to cause subtle and exploitable problems.

Take corporate income tax, capital gains tax and taxation of dividends.

The entire concept of corporate income tax is completely nonsensical for international corporations because they don't need to do much more than rearrange their books and they can report the bulk of their profits in a lower tax jurisdiction, which is what all of them do and there is almost nothing you can do to stop them if you insist on taxing "profit" but allowing profits to be taxed non-uniformly based on international tax jurisdiction. Which means that "corporate income tax" in practice means "tax small and medium sized corporations at a much higher rate than large international corporations." Which is obviously totally inane, so lets get rid of corporate income tax, right?

At this point you've just handed the rich a trivial method of deferring taxation of dividends indefinitely. Instead of issuing profits as dividends at all, corporations can hold the capital internally which causes share price appreciation, and have stock splits as necessary to keep the share price from getting out of hand. Then the shareholder pays no taxes until the shares are sold, which can be put off indefinitely. The disadvantage is that you have a corporation that makes e.g. iPads which holds more cash than they can possibly have a productive internal use for, so they end up investing it perhaps quite inefficiently in sectors of the economy outside of their expertise because doing so is more profitable than issuing dividends and causing shareholders to incur massive taxation. Which is naturally what we see the corporations frequently doing when they have a de facto lack of corporate income tax through tax avoidance.

So you say, fine, corporate income tax sucks and taxing dividends doesn't work, but at least we can really stick it to them with capital gains tax when they sell the shares, right? And now you have a different problem, which is that you're making shares inalienable. If you own a million dollars of shares which you bought for a thousand dollars, you're not going to sell the shares if selling them causes you to lose half of your capital to taxation, even if the stock is clearly under-performing the market. Which causes huge market inefficiencies because capital is tied up in under-performing businesses which can't be sold without incurring significant tax liabilities. There is a trivial way to solve this, which is to allow stockholders to defer capital gains tax when they sell one investment only in order to change what they're investing in by purchasing another investment. But the result is a "weird" tax -- it isn't a capital gains tax anymore, what it really is is a consumption tax with a different rate for spent income derived from investments if the "capital gains" rate isn't set at the earned income rate. Certainly not what most people think of when they discuss a capital gains tax, and on paper allowing investments as a deduction would cause it to not generate nearly as much tax revenue (though it may in practice given tax avoidance).

So all of that is quite irritating if you're trying to extract tax revenue from corporations and the wealthy. The problem is, at bottom, that taxing something discourages that thing and you don't want to discourage investment.

The remaining major tool in the tax box is a normal consumption tax. The problem there is that it's obviously regressive -- the less money you make, the larger a portion of it you have to consume rather than invest, so taxing consumption will cause the rich to pay an unavoidably large amount of taxation (unless they intend to stop buying cars and mansions and air travel), but will disproportionately also tax those less fortunate who must spend a higher percentage of what they make.

As far as I can tell the best solution is to get rid of all taxes other than a consumption tax, and then deal with the fact that consumption taxes are regressive by combining it with a basic income which you can make arbitrarily progressive by increasing its size. This has the additional advantage that the basic income can subsume the plethora of programs like social security which impose arbitrary constraints which (like "retirement age") or are "need based" which, if you consider the programs as a form of negative taxation, turn out to be preposterously regressive because the marginal tax rate of increasing your income and thus becoming ineligible for the programs can approach or even exceed 100%.

The "problem" with flat consumption tax + basic income is that it takes all the horse trading out of the equation, removes all the tax loopholes and pork and treats everyone equally regardless of their lobbying strength, even though you can make it as progressive as you like. K-Street will not be a fan. Everyone else probably should be though -- anyone want to explain how I'm wrong?