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 snack bars. efile Tax Return India credits with regard to example those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction in order to some max of three children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Owning a home 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 structure industry.
Allow deductions for expenses and interest on student loan. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing wares. The cost at work is in part the repair of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn from the investment areas. The stock and bond markets have no equivalent for the real estate’s 1031 pass on. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can be levied as a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase with debt there is very little way us states will survive economically any massive take up tax profits. The only possible way to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to find 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 created the tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income around the upper income earner has left the country for investments in China and the EU in the expense of this US method. 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 frequently manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector of the US and reducing the tax base at a period when debt and an ageing 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 in a very capital gains rate which reduces annually based upon the length of your capital is invested amount of forms can be reduced together with a couple of pages.