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 attributes. Tax credits such as those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to a max of three small. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If 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 educational costs and interest on figuratively speaking. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing materials. The cost of training is partially the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. Quicker GDP grows the greater the government’s option to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase with debt there isn’t really way the us will survive economically with no massive craze of tax revenues. The only possible way to increase taxes through using encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% for 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 came up with tax revenue from the guts class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper Online Income Tax Return Filing India earner leaves the country for investments in China and the EU in the expense of the US current economic crisis. Consumption tax polices beginning inside 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 among 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 tax bill. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based on the length of your capital is invested quantity of forms can be reduced to a couple of pages.