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 in the expense on the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three small. 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 the event the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on figuratively speaking. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing materials. The cost of labor is mainly the maintenance of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s the income 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn out from the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can be levied for a percentage of GDP. The faster GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is no way united states will survive economically with massive increase in tax earnings. The only way possible to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% for 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 Online Income Tax Return Filing India had the dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the very center class far offset the deductions by high income earners.
Today lots of the freed income out of your upper income earner has left the country for investments in China and the EU at the expense of the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in 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 duty. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based using a length of your capital is invested variety of forms can be reduced to a couple of pages.