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 such as those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three younger children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on so to speak .. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing wares. The cost on the job is simply the repair of ones health.
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 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 All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn among the investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as the percentage of GDP. The faster GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in debt there is limited way the us will survive economically your massive craze of tax earnings. The only possible way to increase taxes would be to encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for GST Registration online Mumbai Maharashtra top 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 came up with tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income from the upper income earner leaves the country for investments in China and the EU in the expense of this US method. Consumption tax polices beginning in the 1980s produced a massive increase in the 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 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 at capital gains rate which reduces annually based using a length associated with your capital is invested variety of forms can be reduced together with a couple of pages.