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 credits. Tax credits while those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a child 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. Proudly owning strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for educational costs and interest on so to speak .. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing solutions. The cost at work is partially 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 earnings tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 real estate exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in debt there is limited way the us will survive economically any massive trend of tax proceeds. The only possible way to increase taxes through using encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% for top level Online Income Tax Filing India 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 twin impact of skyrocketing GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner leaves the country for investments in China and the EU in the expense of this US economy. Consumption tax polices beginning planet 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were constantly 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 in taxes. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based with a length associated with your capital is invested amount of forms can be reduced to a couple of pages.