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 such as those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three small. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Buying a home 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 educational costs and interest on student education loans. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing wares. The cost of employment is partly the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s earnings tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied for a percentage of GDP. The faster GDP grows the more government’s chance to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase with debt there isn’t really way the us will survive economically any massive take up tax gains. The only way you can to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced great living 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner has left the country for investments in China and the EU at the expense of the US financial system. Consumption tax polices beginning regarding 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and GST Return Filing Online India blighting the manufacturing sector belonging to 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 tax bill. Except for making up investment profits which are taxed at a capital gains rate which reduces annually based upon the length of capital is invested the number of forms can be reduced using a couple of pages.