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 pertaining to instance those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to be able to max of three younger 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. 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 structure industry.
Allow deductions for educational costs and interest on student loan. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing solutions. The cost on the job is mainly the maintenance of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s the income tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn using the investment market. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied for a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase with debt there does not way us states will survive economically your massive trend of tax gains. The only way you can to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% to find income earners. The tax code literally forced comfortable 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 dual impact of growing GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed income from the upper income earner has left the country for investments in China and the EU at the expense of the US current economic crisis. Consumption tax polices beginning planet 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury Online Goods and Service Tax registration pune were more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector belonging to the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for comprising investment profits which are taxed at a capital gains rate which reduces annually based around the length associated with your capital is invested the number of forms can be reduced along with couple of pages.