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 loans. Tax credits because those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a child deduction together with a max of three of their own kids. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. In case 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 education loans. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing solutions. The cost of employment is in part the repair off ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn using the investment niches. The stock and bond markets have no equivalent on the real estate’s 1031 flow. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase with debt there is no way united states will survive economically your massive take up tax gains. The only possible way to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% for top level income earners. The tax code literally forced comfortable living earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned income had the twin impact of growing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed efile Income Tax Return India contrary to the upper income earner leaves the country for investments in China and the EU in the expense for the US financial system. Consumption tax polices beginning planet 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector among the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based on the length of time capital is invested quantity of forms can be reduced using a couple of pages.