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 pertaining to instance those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce the child deduction to a max of three small. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Proudly owning 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 the construction industry.
Allow deductions for education costs and interest on student loan. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing everything. The cost of labor 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 towards 1980s revenue 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 All investment in stocks and bonds should be deductable only taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied for a percentage of GDP. Quicker GDP grows the greater the government’s option to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase with debt there is limited way the states will survive economically without a massive craze of tax revenues. The only way possible to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% for top level 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 dual 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 off the upper income earner has left the country for investments in China and the EU at the expense of the US current economic crisis. Consumption tax polices beginning globe 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were more often than not manufactured off shore. Today capital is fleeing to China and online gst Return Filing india blighting the manufacturing sector from 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 duty. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based on the length of your capital is invested quantity of forms can be reduced using a couple of pages.