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 loans. Tax credits such as those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to a max of three children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on figuratively speaking. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing solutions. The cost on the job is simply the repair of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s revenue tax code was investment oriented. Today it is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn using the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 property exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. The faster GDP grows the more government’s ability to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase owing money there does not way us states will survive economically without a massive take up tax revenues. The only way you can to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% for top income earners. The tax code literally forced high income earners to “Invest in America”. Such policies e file of Income Tax Return in India 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 developed the tax revenue from the guts class far offset the deductions by high income earners.
Today via a tunnel the freed income out of your upper income earner has left the country for investments in China and the EU at the expense among the US method. 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 frequently 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 of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based upon the length of energy capital is invested the amount of forms can be reduced any couple of pages.