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 credits. Tax credits while those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three of their own kids. 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, the world will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on student loan. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing everything. The cost of employment is mainly the repair of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s the income tax code was investment oriented. Today it is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn over investment areas. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can be levied for a percentage of GDP. The faster GDP grows the more government’s capability to tax. Because of stagnate economy and the exporting of jobs along with the massive increase owing money there does not way the states will survive economically with no massive take up tax gains. The only way possible to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 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 come up with tax revenue from the guts class far offset the deductions by high income earners.
Today lots of the freed income out of your upper income earner has left the country for investments in China and the EU online gst registration in pune maharashtra the expense among the US method. Consumption tax polices beginning planet 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 in 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 tax bill. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based with a length of energy capital is invested quantity of forms can be reduced along with couple of pages.