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 loans. Tax credits with regard to example 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 the child deduction to be able to max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing everything. The cost on the job is partly the repair off ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s earnings tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn over investment niches. The stock and bond markets have no equivalent on the real estate’s 1031 pass on. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as a percentage of GDP. Quicker GDP grows the more government’s ability to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in debt there isn’t really way the usa will survive economically with massive increase in tax gains. The only possible way to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for Online GST Return Filing the top 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 created the tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income out of your upper income earner has left the country for investments in China and the EU in the expense with the US economic state. Consumption tax polices beginning globe 1980s produced a massive increase in 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 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 tax bill. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based with a length associated with your capital is invested the amount of forms can be reduced to a couple of pages.