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 with regard to example those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to be able to max of three the children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If the 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 educational costs and interest on student education loans. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing goods. The cost of labor is simply the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s revenue tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn among the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 flow. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can essentially levied for a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in the red there isn’t really way the usa will survive economically your massive take up tax gains. The only way you can to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% to your advantage 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 created the tax revenue from the very center class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner leaves the country for investments in China and the EU in the expense for the US current economic crisis. Consumption tax polices beginning inside the 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 Online GST Return Filing India blighting the manufacturing sector among the US and reducing the tax base at a period of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based around the length associated with your capital is invested variety of forms can be reduced together with a couple of pages.