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 with regard to example 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 a kid deduction to be able to max of three younger children. The country is full, encouraging large families is overlook.
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 will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for expenses and interest on student loan. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing materials. The cost of labor is in part 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 salary tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn using the investment areas. The stock and bond markets have no equivalent towards the real estate’s 1031 exchange. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase with debt there isn’t really way united states will survive economically your massive take up tax gains. The only way you can to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% for the 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 accelerating 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 plenty of the freed income out of your upper income earner leaves the country for investments in China and the EU at the expense of this US financial system. Consumption tax polices beginning regarding 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 GST Application Mumbai Maharashtra India blighting the manufacturing sector in the US and reducing the tax base at a time full when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based on the length of energy capital is invested quantity of forms can be reduced to a couple of pages.