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 the youngster deduction in order to some max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In the event 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 education costs and interest on student loan. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing goods. The cost of employment is partly the repair 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 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn using the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 pass on. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. The faster GDP grows the more government’s capability to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there does not way us states will survive economically your massive trend of tax gains. The only way possible to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% for top level 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 growing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense among the US economic state. Consumption tax polices beginning planet 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were frequently 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 of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal Income Tax Rates India duty. Except for making up investment profits which are taxed at a capital gains rate which reduces annually based with a length of energy capital is invested the number of forms can be reduced along with couple of pages.