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 credit. Tax credits such as those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to be able to max of three children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. When the 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 expenses and interest on student loan. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing wares. The cost of labor is in part the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for 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 collaborators. 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 All investment in stocks and bonds in order to deductable in support taxed when money is withdrawn from the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 trading. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied for a percentage of GDP. Quicker GDP grows the greater the government’s option to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is very little way us states will survive economically with no massive take up tax profits. The only way you can to increase taxes is encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for the top 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 developed the tax revenue from the guts class far offset the deductions by high income earners.
Today plenty of the freed income off the upper income earner leaves the country for investments in China and the EU at the expense for the US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and ITR Return File India blighting the manufacturing sector from the US and reducing the tax base at a period when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for making up investment profits which are taxed at a capital gains rate which reduces annually based with a length of your capital is invested variety of forms can be reduced any couple of pages.