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 attributes. Tax credits with regard to example those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction the max of three the children. 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 world will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for expenses and interest on student loan. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing materials. The cost of employment is simply the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s the income tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn over investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied being a percentage of GDP. The faster GDP grows the more government’s capacity to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in the red there does not way the us will survive economically any massive increase in tax profits. The only possible way to increase taxes end up being encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% to find income earners. The tax code literally forced huge salary 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 developed the tax revenue from the very center class far offset the deductions by high income earners.
Today via a tunnel the freed income around the upper income earner has left the country for investments in China and the EU at the expense of the US economy. Consumption tax polices beginning in the 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were excessively manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector among the US and reducing the tax base at an occasion when debt and Online GST Mumbai Maharashtra a maturing population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based around the length of capital is invested quantity of forms can be reduced any couple of pages.