Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax snack bars. Tax credits because those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the child deduction to a max of three of their own kids. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If your 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 expenses and interest on figuratively speaking. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing goods. The cost of labor is partly the repair of ones health.
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 Online IT Return Filing India is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds always be deductable just taxed when money is withdrawn among the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as a percentage of GDP. Quicker GDP grows the more government’s option 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 revenues. The only possible way to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax 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 dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income from the upper income earner has left the country for investments in China and the EU at the expense of this US economy. Consumption tax polices beginning regarding 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were constantly 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 period when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based using a length of energy capital is invested the number of forms can be reduced along with couple of pages.