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 attributes. Tax credits pertaining to instance those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the 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 your mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on student education loans. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing goods. The cost of training 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 towards 1980s salary tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can be levied for a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in debt there is no way the usa will survive economically your massive trend of tax earnings. The only way you can to increase taxes would be to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for top level income earners. The tax code literally forced high income 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 growing 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 lots of the freed income around the upper income earner leaves the country for investments online gst Registration In mumbai Maharashtra China and the EU at the expense of this US current economic crisis. Consumption tax polices beginning planet 1980s produced a massive increase in the 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 from the US and reducing the tax base at a time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based on the length of time capital is invested variety of forms can be reduced any couple of pages.