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 loans. Tax credits such as those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to a max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on student education loans. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing everything. The cost of training is simply the maintenance of ones nicely.
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 focused. 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. The faster GDP grows the greater the government’s option to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase with debt there isn’t really way the us will survive economically with massive craze of tax gains. The only way possible to increase taxes would be to 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 great living 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 growing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the guts class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper income earner leaves the country for investments in China and the EU in the expense for the US method. Consumption tax polices beginning in the 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and GST Return Filing Online India blighting the manufacturing sector belonging to the US and reducing the tax base at a period of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based on the length of capital is invested the number of forms can be reduced using a couple of pages.