If I'm remembering correctly, primary home mortgage interest is the single biggest deduction (also known as a "loophole") in our (the US) tax code.
We would need a fair few laws for the government to be able to get the information to cover most people's taxes, though I think this is less true after the standard deduction was doubled during the Trump years. (Banks have reporting duties, but are not run by the government so anything not directly related to fraud prevention isn't covered under the law)
That deduction is no longer generally useful to take. The 2017 tax act basically made that not necessary for most people -- almost everyone just takes the standard deduction now.
The government already has all the info they need to create near perfect tax returns for everyone. The IRS doesn't necessarily have it, but the information exists in databases that can be accessed.
The way it's done in Japan, they send you a form. If it's right, you're good and you do nothing. If it's not, you send them a correction.
Sure, if you have a bunch of weird expenses/deductions you can file, but for most people, the numbers the government has are already correct.