Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often breaks have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax credit. Tax credits pertaining to instance those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the child deduction the max of three small. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for educational costs and interest on student loans. Online IT Return Filing India pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing goods. The cost of training is simply the upkeep of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s earnings tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading partners. The stagnating economy and the ballooning trade deficit are symptoms of consumption tax policies.
Eliminate 401K and IRA programs. All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn out from the investment niches. The stock and bond markets have no equivalent on the real estate’s 1031 trading. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied being a percentage of GDP. The faster GDP grows the greater the government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in difficulty there does not way united states will survive economically any massive trend of tax earnings. The only possible way to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% for the top income earners. The tax code literally forced high income earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned income had the dual impact of skyrocketing GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the guts class far offset the deductions by high income earners.
Today almost all of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense of the US economy. Consumption tax polices beginning inside the 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a period of time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based with a length of energy capital is invested quantity of forms can be reduced using a couple of pages.