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 pertaining to instance those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the child deduction in order to some max of three 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 world will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on figuratively speaking. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing solutions. The cost of training is partially the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into 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 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 All investment in stocks and bonds should be deductable only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. The faster GDP grows the more government’s capacity to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is no way us states will survive economically any massive trend of tax profits. The only way you can to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% for top income earners. The tax code literally forced great living earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned Online Income Tax Return Filing India 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 plenty of the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense of the US method. Consumption tax polices beginning globe 1980s produced a massive increase in the 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 duty. Except for making up investment profits which are taxed at capital gains rate which reduces annually based upon the length associated with your capital is invested the number of forms can be reduced using a couple of pages.