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 while those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a child deduction together with a max of three small. 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 will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on student loan. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing wares. The cost of employment is partially 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 on the 1980s earnings tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds in order to be deductable and only taxed when money is withdrawn from the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 pass on. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can be levied for a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in debt there isn’t really way united states will survive economically any massive increase in Online Tax Return Filing India proceeds. The only way you can to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced financial security 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 guts class far offset the deductions by high income earners.
Today via a tunnel 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 financial system. 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 excessively 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 period of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based with a length of time capital is invested amount of forms can be reduced together with a couple of pages.