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 such as those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three children. The country is full, encouraging large families is carry.
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, the country will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for expenses and interest on student loans. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing everything. The cost of training is simply the maintenance of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s the income tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn from the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can essentially levied for a percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Given the stagnate economy and the exporting of jobs along with the massive increase with debt there is no way the us will survive economically with massive trend of tax revenues. The only way you can to increase taxes through using encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% for top level income earners. The tax code literally forced great 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 dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the center class far offset the deductions by high Income Tax Return India Online earners.
Today lots of the freed income off the upper income earner has left the country for investments in China and the EU at the expense of this US economic state. Consumption tax polices beginning planet 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 from the US and reducing the tax base at a period when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based upon the length of time capital is invested the number of forms can be reduced to a couple of pages.