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 with regard to example those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three of their own kids. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on student loan. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing everything. The cost on the job is partially the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s the income tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds always be deductable in support taxed when money is withdrawn among the investment niches. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. Quicker 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 difficulty there is very little way us states will survive economically without a massive craze of tax earnings. The only way possible to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% for the top income earners. The tax code literally forced financial security 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 growing 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 out of your upper Online Income Tax Return Filing India earner has left the country for investments in China and the EU in the expense of this US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase in the 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 belonging to the US and reducing the tax base at a time when debt and a maturing 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 in a very capital gains rate which reduces annually based using a length associated with your capital is invested the number of forms can be reduced to a couple of pages.