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 credits. Tax credits such as those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. So here is 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. Home ownership strengthens and adds resilience to the economy. If 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 educational costs and interest on student loan. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing wares. The cost of training is mainly the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s earnings tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds ought to deductable merely taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 pass on. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. The faster GDP grows the greater the government’s chance to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase with debt there is limited way the usa will survive economically with massive craze of tax profits. The only way possible to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes 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 accelerating GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense among the US economic state. Consumption tax polices beginning inside the 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and online itr filing india blighting the manufacturing sector of 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 accounting for investment profits which are taxed at capital gains rate which reduces annually based with a length of energy capital is invested the number of forms can be reduced together with a couple of pages.