the big issue have already been addressed, I won't reiterate them too much. The short version being that 10% of someone right at poverty does them far more harm then 10% of someone totally rich. Part of this is because there is a certain minimum amount everyone must spend to survive, so a 10% tax on income may drop a poorer person disposable income (income after minimum cost to just survive) by 99% and a rich persons disposable income by 10.2 %. It's argued that it's the disposable income which really affects ones satisfaction, so the guy who loses 99% of it suffers greater.
Studies do show that the very poor money is a major factor, and an increase of a small percentage of income can have a very real affect on happiness (more by removing stress that they won't have enough to survive), as income goes up the difference in happiness that extra income provides starts to drop quite rapidly. By middle class the difference is actually pretty minimal as income increases. by upper class it has no real affect on happiness. Of course this is only one factor in considering taxes.
However, I wanted to focus on the other issue, our complex tax laws. We have more then just the flat percentage we pay, we have all kinds of deductibles, credits, etc etc that are factored into our taxes.
Some argue that these are too complex, making it impossible for anyone to know how to pay their taxes. When you have to factor in the price of a tax consultant to figure out what you owe then perhaps things are a little too complex? I won't speak to the complexity issue, because it's sort of arbitrary (how complex is too complex?). For now lets look at the difference between a flat tax rate and just one or two of these sort of adjustments, something small enough to not make taxes too complex; is it worth doing?
There is a reason for all these laws, they are designed to encourage behaviors we want. For instance I donate quite a bit of money to charity...or did last year (personal investments mean I won't get to this year sadly). I was not forced to pay taxes on my charitable donations, so I'm encouraged to give my clothing to charity rather then throwing it out because not only will it help people, but it will save me a tiny bit of money. To those who are not motivated by helping others the tax savings can still result in charitable donations, and those donations can help the goverment (better to give a 30% tax savings to someone donating their old clothes to the poor then to pay 100% of the clothes costs in welfare for someone below the poverty line to buy clothes).
I'm looking to buy a new car soon. I seriously looked at an electric partially because of the tax savings on it (turns out it can't manage my long drives). My parents looked into solar panels for their house for the same reason. These savings aren't much, but they can be just enough to push those who are undecided towards these options. In both cases these options help the enviroment, which the goverment feels is worthwhile. By applying tax savings they can better encourage these investments. Ironically my parents didn't get the solar panels because their retired and wouldn't be able to gain much of the tax savings, if they were able to they would have bought the panels.
The point is, by applying adjustments the goverment is able to provide subtle encouragement to every day folks to do things they approve of. While there are other ways to do some of this, for instance subsidizing the solar panel and electric car industry so they can offer cheaper services, doing it through taxes is deemed the best approach (it's more direct control over the results for limited logistical overhead, and allows more competition and market forces over subsidization). Other things, like encouraging people to donate their clothes instead of throwing them out, is really hard to do without taxes refunds.
The goverment feels that this bit of extra complexity in taxes is worth it because taxes are the main way the government can encourage positive activities without mandating them by law.
Personally, with everything so automated I would love for the government to automatically communicate with banks and businesses and generate my basic taxes for me; there is little need for me to manually enter this all when the goverment is already collecting and correlating it! Just let me add in the deductibles I get for obscure things. I should never ever ever have to calculate my tax on stocks, which is annoying enough to make me want to just stop investing in the stock market lol. Ah well, maybe in another 20 years it will happen lol.