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 while those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three of their own kids. The country is full, encouraging large families is get.
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 world will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on student loans. Online IT Return Filing India pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing everything. The cost on the job is partly the maintenance of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn using the investment niches. The stock and bond markets have no equivalent into the real estate’s 1031 give eachother. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can simply be levied as a percentage of GDP. The faster GDP grows the greater the government’s capability to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in difficulty there is no way the us will survive economically any massive craze of tax profits. The only way you can to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s 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 twin impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the very center class far offset the deductions by high income earners.
Today almost all of the freed income off the upper income earner leaves the country for investments in China and the EU in the expense with the US financial system. Consumption tax polices beginning in the 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 among the US and reducing the tax base at a period of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed at capital gains rate which reduces annually based using a length of time capital is invested the number of forms can be reduced along with couple of pages.