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 credit. Tax credits such as those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a child deduction together with a max of three of their own kids. The country is full, encouraging large families is carry.
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 will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on so to speak .. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing wares. The cost of labor is simply the maintenance of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s revenue tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn using the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 flow. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. Quicker GDP grows the more government’s chance to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in debt there is no way us states will survive economically your massive development of tax proceeds. The only way you can to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for the top income earners. The tax code literally forced financial security 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 guts class far offset the deductions by high income earners.
Today almost all of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense of the US method. Consumption tax polices beginning globe 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and Online GST Return 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 place a burden on. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based upon the length of energy capital is invested variety of forms can be reduced any couple of pages.