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 credit. Tax credits such as those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a kid deduction in order to some max of three of their own kids. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for expenses and interest on student loans. Online IT Return Filing India pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing wares. The cost of labor is partly the repair 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 oriented. 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can only be levied being a percentage of GDP. The faster GDP grows the greater the government’s capability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there is very little way united states will survive economically any massive craze of tax revenues. The only way you can to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to find 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 very center class far offset the deductions by high income earners.
Today much of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense of the US current economic crisis. Consumption tax polices beginning inside the 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 India blighting the manufacturing sector belonging to the US and reducing the tax base at an occasion when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based upon the length of energy capital is invested the number of forms can be reduced together with a couple of pages.