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 loans. Tax credits while those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the child deduction in order to some max of three the children. 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. When the mortgage deduction is eliminated, as the President’s council suggests, the world 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 the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing wares. The cost of employment is partly the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s salary tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. The faster GDP grows the greater the government’s chance to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in difficulty there isn’t really way united states will survive economically your massive increase in tax earnings. The only way you can to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for top level income earners. The tax code literally forced high income 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed income from the upper income earner has left the country for investments in China and the EU in the expense among the US current economic crisis. Consumption tax polices beginning in the 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 GST Return Filing Online India blighting the manufacturing sector among 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 accounting for investment profits which are taxed at a capital gains rate which reduces annually based on the length of your capital is invested quantity of forms can be reduced any couple of pages.