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 pertaining to instance those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a kid deduction together with a max of three the children. 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. In case the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for educational costs and interest on so to speak .. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing wares. The cost of labor is in part the upkeep of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. The faster GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is very little way the states will survive economically any massive take up tax proceeds. The only way you can to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for top income earners. The tax code literally forced comfortable living earners to “Invest in America”. Such policies of deductions for GST Application Mumbai Maharashtra 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 come up with tax revenue from the middle 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 with the US economy. Consumption tax polices beginning planet 1980s produced a massive increase regarding 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 a period of time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based using a length of your capital is invested quantity of forms can be reduced along with couple of pages.