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 with regard to example those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three younger children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for expenses and interest on student loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing solutions. The cost on the job 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 to 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 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn from the investment markets.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 give eachother. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can be levied as being a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase owing money there is no way the usa will survive economically with no massive increase in tax gains. The only way possible to increase taxes is encourage a massive increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% to find 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 developed the tax revenue from the middle class far offset the deductions by high income earners.
Today via a tunnel the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense of the US economic state. Consumption tax polices beginning regarding 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 Online Itr Return File India blighting the manufacturing sector among the US and reducing the tax base at a time full when debt and a maturing 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 energy capital is invested variety of forms can be reduced along with couple of pages.