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 such as those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three of their own kids. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for education costs and interest on student education loans. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing goods. The cost of training is simply the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into 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 friends. 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn among the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 flow. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can fundamentally be levied for a percentage of GDP. The faster GDP grows the greater the government’s capability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in the red there is no way the usa will survive economically without a massive take up tax revenues. The only possible way to increase taxes would be to encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 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 online Income tax Return Filing india had the dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the very center class far offset the deductions by high income earners.
Today much of the freed income off the upper income earner has left the country for investments in China and the EU in the expense with the US economy. Consumption tax polices beginning planet 1980s produced a massive increase regarding 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 among the US and reducing the tax base at an occasion when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based around the length of time capital is invested variety of forms can be reduced any couple of pages.