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 among the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the child deduction together with a max of three the children. The country is full, encouraging large families is pass.
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 expenses and interest on so to speak .. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing solutions. The cost on the job is simply the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s the efile Income Tax Return in India 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 All investment in stocks and bonds always be deductable in support taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. The faster GDP grows the greater the government’s option to tax. Because of stagnate economy and the exporting of jobs along with the massive increase owing money there does not way united states will survive economically any massive increase in tax earnings. The only way you can to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% for top level income earners. The tax code literally forced high income 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 very center class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper income earner leaves the country for investments in China and the EU in the expense with the US financial system. Consumption tax polices beginning planet 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were more often than not 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 ageing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based around the length of energy capital is invested quantity of forms can be reduced together with a couple of pages.