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 loans. Tax credits with regard to example those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to be able to max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for educational costs and interest on student education loans. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing solutions. The cost at work is partially the repair off ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 spouse. The stagnating economy and the ballooning trade deficit are symptoms of consumption Online Tax Return Filing India policies.
Eliminate 401K and IRA programs. All investment in stocks and bonds in order to be deductable and only taxed when money is withdrawn from the investment niches. The stock and bond markets have no equivalent to the real estate’s 1031 exchange. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there does not way us states will survive economically without a massive development of tax proceeds. The only way possible to increase taxes through using encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for 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 developed the tax revenue from the center class far offset the deductions by high income earners.
Today plenty of the freed income out of your upper income earner has left the country for investments in China and the EU at the expense with the US economy. Consumption tax polices beginning in the 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were excessively 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 duty. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based on the length of capital is invested the amount of forms can be reduced to a couple of pages.