A systems-thinking approach to modernizing how America taxes wealth, rewards work, and funds its future.
The U.S. tax code is an algorithm — and it is badly broken. Not because the rates are wrong, but because 4,000 pages of interacting rules, carve-outs, and parallel systems have made it incomprehensible, unfair, and structurally incapable of collecting what it’s owed. Complexity is not a side effect. It is the mechanism through which wealth inequality compounds.
This project proposes a cleaner, more durable alternative — guided by four design tenets and starting with the piece of the code that does the most damage.
Every proposal in this project is evaluated against four principles. When they conflict, the tensions are acknowledged explicitly rather than papered over.
1. Radical Simplicity. The tax code should be broadly understood and almost entirely automated. Simplicity reduces compliance costs, economic deadweight loss, and evasion vectors. It also enables more meaningful public debate about national priorities. If citizens can’t understand the system, they can’t govern it.
2. Fiscal Durability. Reform must be meaningfully revenue-positive and resilient to political cycles. The federal deficit exceeds $2 trillion annually; net interest on the debt is now a top-five budget line item. Reforms that are merely “revenue neutral” are no longer sufficient. Revenue estimates must account for behavioral responses.
3. Fuel the Climb. Americans who are building wealth — buying homes, saving for retirement, starting businesses — should be unambiguously better off under these proposals than under current law. The system should reward work, saving, and wealth-building. It should not create structural advantages that entrench dynastic wealth at the expense of economic mobility.
4. Reward Innovation. Risk-taking and entrepreneurship have genuine social value. The framework must preserve strong incentives to start companies, build businesses, and allocate capital productively — particularly at the early stage where risk is highest and social returns are greatest.
The centerpiece of this project: a structural redesign of the entire U.S. capital gains tax system, built on four rules.
These four rules replace the estate tax, the Alternative Minimum Tax, the Net Investment Income Tax, and twelve special exclusions including QSBS, 1031 exchanges, stepped-up basis, and carried interest — the largest simplification of the capital gains code ever proposed.
The framework is revenue-positive ($85–203B/yr depending on calibration), protects small founders and homeowners, and creates a bipartisan path: estate tax repeal for the right, billionaire effective rate reform for the left, and a system ordinary citizens can actually understand for everyone.
Read my proposal for the Lifetime Gains Framework tax reform →
The capital gains system is the foundation, but it’s not the whole building. Several companion proposals are in development, each designed to work independently or as part of a cohesive fiscal system:
Social Security modernization. A proposal to broaden the contribution base, restore 75-year solvency without cutting scheduled benefits, and treat wage earners and business owners more consistently. A working draft is complete.
Charitable giving reform. The Lifetime Gains Framework treats charitable transfers as realization events — closing the largest remaining avoidance route. A companion proposal will address how to preserve and strengthen incentives for charitable giving through a universal credit, ensuring the tax benefit reaches middle-class donors rather than concentrating among the wealthy.
Child benefit consolidation. The current landscape of CTC, EITC, CDCC, and dependent exemptions is fragmented and hard to navigate. A companion proposal will consolidate these into a single, fully refundable child benefit — simpler for families, more effective at reducing child poverty.
Retirement account simplification. Traditional 401(k), Traditional IRA, Roth IRA, Roth 401(k), SEP IRA, SIMPLE IRA, 529 plans — the current system has too many vehicles with overlapping purposes and conflicting rules. A companion proposal will streamline retirement savings into fewer, more intuitive accounts while preserving the Roth reforms introduced in the Lifetime Gains Framework.
Each of these is guided by the same four design tenets above and designed to stand alone or work as part of a cohesive fiscal system.
By Matt Sly. I’m a software entrepreneur with twenty years of experience building products used by millions of people. I approach the tax code the way I would any complex system that has accumulated decades of technical debt without a clear owner: identify the structural problems, propose a major refactor, and invite scrutiny.
This project is not affiliated with a political party, campaign, or institution. It is an attempt to apply systems thinking, real-world experience, and honest tradeoffs to a problem that sits at the intersection of economics, equity, and long-term national health.