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 attributes. Tax credits pertaining to instance 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 your son or daughter deduction to a max of three of their own kids. 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. When the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for education costs and interest on so to speak .. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing everything. The cost of employment is in part the repair e file of Income Tax Return in India ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 flow. The 1031 industry exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can simply be levied being a percentage of GDP. The faster GDP grows the greater the government’s ability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase with debt there is limited way us states will survive economically without a massive development of tax revenues. The only possible way to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% to your advantage 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 came up with tax revenue from the guts class far offset the deductions by high income earners.
Today plenty of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense of this US method. Consumption tax polices beginning in the 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were too often manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector belonging to the US and reducing the tax base at a time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for making up investment profits which are taxed at capital gains rate which reduces annually based upon the length associated with your capital is invested the amount of forms can be reduced together with a couple of pages.