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 credit. Tax credits while those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three of their own kids. The country is full, Online GST Pune Maharashtra encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for educational costs and interest on student education loans. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing wares. The cost of labor is partially the repair of ones nicely.
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 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied as being a percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in debt there is very little way the us will survive economically with massive trend of tax gains. The only way possible 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 great 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 dual impact of accelerating 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 almost all of the freed income contrary to the upper income earner has left the country for investments in China and the EU at the expense with the US current economic crisis. Consumption tax polices beginning globe 1980s produced a massive increase in 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 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 duty. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based using a length of energy capital is invested the amount of forms can be reduced to a couple of pages.