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 because those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction together with a max of three the 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 your mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on so to speak .. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing goods. The cost of training is mainly the repair off ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into 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 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn over investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 exchange. The 1031 industry exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as being a percentage of GDP. The faster GDP grows the more government’s chance to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there is very little way the states will survive economically your massive development of tax revenues. The only way possible to increase taxes would be to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for top 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 twin impact of growing GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.
Today plenty of the freed income off the upper income earner has left the country for investments in China and Online GST Mumbai Maharashtra the EU at the expense with the US economic state. Consumption tax polices beginning inside 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 India blighting the manufacturing sector from the US and reducing the tax base at a time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based upon the length associated with your capital is invested quantity of forms can be reduced any couple of pages.