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 snack bars. Tax credits because those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In case 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 the construction industry.
Allow deductions for education costs and interest on so to speak .. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing everything. The cost on the job is partly the repair of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s the income 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 All investment in stocks and bonds in order to deductable only taxed when money is withdrawn over investment areas. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. The faster GDP grows the more government’s capacity to tax. Within the stagnate economy and the exporting of jobs along with the massive increase Online ITR Filing in India debt there isn’t really way us states will survive economically any massive trend of tax profits. The only possible way to increase taxes end up being encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s taxes rates approached 90% to your advantage 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 dual impact of skyrocketing GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the very center class far offset the deductions by high income earners.
Today much 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 economic state. Consumption tax polices beginning inside the 1980s produced a massive increase planet 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 an occasion when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based upon the length of time capital is invested the number of forms can be reduced using a couple of pages.