Income taxes to Encourage Investment

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 credits. Tax credits while those for race horses benefit the few in the expense of the many.

Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?

Reduce your son or daughter deduction together with a max of three younger 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. If the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of layout industry.

Allow deductions for education costs and interest on student loans. It is advantageous for brand new to encourage education.

Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing goods. The cost on the job is mainly the repair of ones nicely.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s the income tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 flow. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to be utilized for further investment.

(Notes)

GDP and Taxes. Taxes can simply be levied as being a percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase owing money there does not way the usa will survive economically with no massive increase in tax revenues. The only possible way to increase taxes is to encourage huge increase in GDP.

Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% to find income earners. The tax code literally forced comfortable 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 the tax revenue from the middle class far offset the deductions by high income earners.

Today lots of the freed Online Income Tax Return Filing India contrary to the upper income earner has left the country for investments in China and the EU at the expense with the US economic state. Consumption tax polices beginning planet 1980s produced a massive increase inside of 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 time full when debt and a maturing population requires greater tax revenues.

The changes above significantly simplify personal income tax bill. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based on the length of energy capital is invested the amount of forms can be reduced along with couple of pages.

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