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 attributes. Tax credits because 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 a child deduction in order to some 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. In the event the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for expenses and interest on so to speak .. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing wares. The cost at work is simply the repair of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s revenue tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn out from the investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 industry exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied for a percentage of GDP. The faster GDP grows the more government’s option to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there isn’t really way the usa will survive economically any massive craze of tax earnings. The only possible way to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced huge salary 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 came up with tax revenue from the guts 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 in the expense with the US economy. Consumption tax polices beginning globe 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury Online Goods And Service Tax Registration Pune were more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a time full when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based around the length of capital is invested the number of forms can be reduced together with a couple of pages.