Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax credits. Tax credits while those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If 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 market industry.
Allow deductions for expenses and interest on so to speak .. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing goods. The cost on the job is in part the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 young 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 All investment in stocks and bonds in order to be deductable just taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 flow. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can simply be levied as a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there is limited way the states will survive economically your massive craze of tax profits. The only way possible to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Your 1950-60s 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the middle class far offset the deductions by high income earners.
Today almost all of the freed income off the upper income earner leaves the country for investments in China and the EU at the expense with the US financial system. Consumption tax polices beginning globe 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and GST Return Filing Online India blighting the manufacturing sector of 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 comprising investment profits which are taxed in a very capital gains rate which reduces annually based around the length of your capital is invested amount of forms can be reduced along with couple of pages.