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 snack bars. Tax credits while those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for expenses and interest on student loans. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing solutions. The cost of training is simply the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s revenue tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn among the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 industry exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can only be levied for a percentage of GDP. The faster GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in debt there is limited way the states will survive economically with no massive increase in Online Tax Return Filing India revenues. The only way you can to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for top level 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the guts class far offset the deductions by high income earners.
Today much of the freed income from the upper income earner has left the country for investments in China and the EU at the expense with the US financial system. Consumption tax polices beginning planet 1980s produced a massive increase a 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 of 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 duty. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based upon the length of your capital is invested the amount of forms can be reduced to a couple of pages.