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 because those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three younger children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on so to speak .. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. Online GST Registration in Pune Maharashtra business one deducts the associated with producing wares. The cost of training is partly the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can only be levied for a percentage of GDP. The faster GDP grows the greater the government’s chance to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there isn’t really way the usa will survive economically your massive take up tax proceeds. The only possible way to increase taxes is to encourage a massive increase in GDP.
Encouraging Domestic Investment. Your 1950-60s tax 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 dual impact of skyrocketing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today plenty of the freed income off the upper income earner leaves the country for investments in China and the EU in the expense among the US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase inside of 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 a time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based with a length of time capital is invested variety of forms can be reduced along with couple of pages.