In addition to problems of harmonization between tax systems, there are also internal problems within individual, national tax systems. National systems, particularly in developed countries, are usually highly complex and tend to be modified frequently and in an uncoordinated manner in response to particular political situations and revenue opportunities. This results in a progressive accumulation of fiscal measures, which in their totality give rise to many internal inconsistencies, tax loopholes (facilitating tax avoidance), and differing degrees of inequity. The latter is usually to the disproportionate advantage of those individuals and corporations already privileged by the system.
[Industrialized countries] As an example, it was estimated in 1974 that the USA would lose in 1975 $78 billion through tax loopholes. This is $13.3 billion more than had been lost three years previously.
The use of legal means to minimize tax is simply good tax planning. Tax avoidance, as opposed to tax evasion, is actually a fundamental process of any market system. It is the process by which the participants in a market economy, be they individuals or corporations, go price-shopping for government services.