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 loans. Tax credits because those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction to a max of three children. The country is full, encouraging large families is carry.
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 of market industry.
Allow deductions for educational costs and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing wares. The cost on the job is in part the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s earnings tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn out from the investment markets. The stock and bond markets have no equivalent to the real estate’s 1031 pass on. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there is no way us states will survive economically with massive development of tax profits. The only way possible to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% for the top income earners. The tax code literally forced comfortable 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 come up with tax revenue from the very center class far offset the deductions by high Income Tax Return India Online earners.
Today plenty of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense for the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were frequently 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 of time 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 in a very capital gains rate which reduces annually based with a length of your capital is invested the amount of forms can be reduced to a couple of pages.