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 credit. Tax credits because those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction together with a max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on student loan. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing everything. The cost of training is in part the repair off ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 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 All investment in stocks and bonds should be deductable only taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied for a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in debt there is very little way united states will survive economically your massive development of tax earnings. The only possible way to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% for top income earners. The tax code literally forced financial security earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned Online Income Tax Return Filing India had the twin impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income out of your upper income earner leaves the country for investments in China and the EU in the expense among the US economy. Consumption tax polices beginning globe 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 among 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 on the capital gains rate which reduces annually based upon the length of time capital is invested amount of forms can be reduced any couple of pages.