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 credit. Tax credits such as those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction together with 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. In case the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery e file of Income Tax India market industry.
Allow deductions for education costs and interest on student 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 solutions. The cost of labor is in part the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn out from the investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can only be levied as a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in the red there is limited way united states will survive economically your massive development of tax gains. The only way possible to increase taxes is encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% for top 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 dual impact of growing GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.
Today almost all of the freed income off the upper income earner has left the country for investments in China and the EU in the expense of this US economic state. Consumption tax polices beginning in the 1980s produced a massive increase in the 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 from the US and reducing the tax base at a period when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based using a length of energy capital is invested quantity of forms can be reduced using a couple of pages.