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 attributes. Tax credits pertaining to instance those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three small. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Proudly owning 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 structure industry.
Allow deductions for education costs and interest on student education loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing everything. The cost of labor is simply the repair off ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s revenue tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 pass on. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can be levied as the percentage of GDP. The faster GDP grows the more government’s option to tax. Because of stagnate economy and the exporting of jobs along with the massive increase owing money there is limited way the usa will survive economically with no massive trend of tax profits. The only way you can to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Within 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 growing GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the guts class far offset the deductions by high income earners.
Today almost all of the freed income out of your upper income earner leaves the country for investments in China and the EU at the expense among the US financial system. Consumption tax polices beginning Online GST Registration in Mumbai Maharashtra the 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were too often 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 time full when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based using a length of energy capital is invested variety of forms can be reduced to a couple of pages.