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 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 a child deduction the max of three children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for expenses and interest on student loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing wares. The cost at work is partly the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s salary tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 industry exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as the percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is limited way the usa will survive economically your massive development of tax gains. The only way possible to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% for 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 dual impact of growing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the very center class far offset the deductions by high income earners.
Today much of the freed income from the upper income earner leaves the country for investments in China and Online GST Registration Maharashtra the EU at the expense for the US economic state. Consumption tax polices beginning globe 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 of 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 in taxes. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based around the length of your capital is invested amount of forms can be reduced along with couple of pages.