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 for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to a max of three younger children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on student loan. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing wares. The cost of employment is mainly the maintenance of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s revenue tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn among the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 flow. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can be levied as being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in debt there is very little way the usa will survive economically without a massive increase in tax proceeds. The only possible way to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax 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 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 around the upper income earner has left the country for investments in China and the EU at the expense among the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and Online GST Return Filing India blighting the manufacturing sector from the US and reducing the tax base at a period when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based on the length of capital is invested the amount of forms can be reduced to a couple of pages.