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 credits. Tax credits such as those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. Must you want one efile tax return India 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. Home ownership strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of market 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 policy. In business one deducts the price producing everything. The cost at work is simply the upkeep of ones fitness.
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 young 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn from the investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can be levied as the percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase with debt there isn’t really way the us will survive economically with no massive trend of tax earnings. The only possible way to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% to find 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 accelerating GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the middle class far offset the deductions by high income earners.
Today almost all of the freed income around the upper income earner has left the country for investments in China and the EU in the expense of this US financial system. Consumption tax polices beginning in the 1980s produced a massive increase a 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 an occasion when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based around the length associated with your capital is invested quantity of forms can be reduced to a couple of pages.