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 snack bars. Tax credits with regard to example those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction the max of three younger children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education 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 price producing goods. The cost of labor is simply 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 oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 marketplace exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as the percentage of GDP. Quicker GDP grows the greater the government’s chance to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is very little way us states will survive economically your massive increase in tax revenues. The only way you can to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% for the top 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 twin impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense for the US financial system. Consumption tax polices beginning inside the 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 ITR Return File India blighting the manufacturing sector among 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 in taxes. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based with a length of capital is invested amount of forms can be reduced together with a couple of pages.