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 in the expense on the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to a max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for expenses and interest on student loan. 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 solutions. The cost of training is partially 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 the income 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn using the investment niches. 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 being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way the states will survive economically with massive trend of tax proceeds. The only way you can to increase taxes through using encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax 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 accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income around the upper income earner leaves the country for Online GST Pune Maharashtra investments in China and the EU in the expense for the US method. Consumption tax polices beginning regarding 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were excessively 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 time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for comprising investment profits which are taxed at a 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.