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 attributes. Tax credits with regard to example those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to be able to max of three younger children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Owning a home 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 market industry.
Allow deductions for expenses and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing materials. The cost of labor is partly the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s revenue tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent on the real estate’s 1031 flow. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can be levied as being a percentage of GDP. The faster GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is no way united states will survive economically without a massive craze of tax revenues. The only way you can to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% to your advantage 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.
Today much of the freed income out of your upper income earner has left the country for investments in China and the EU at the expense for the US economic state. Consumption tax polices beginning in the 1980s produced a massive increase a 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 of the US and reducing the tax base at a time full when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for comprising investment profits which are taxed at a capital gains rate which reduces annually based with a length of time capital is invested variety of forms can be reduced any couple of pages.