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 pertaining to instance those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction the max of three of their own kids. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of durable 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 plan. In business one deducts the cost of producing wares. The cost of employment is partially the maintenance of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments ITR Return in India America”. Prior into the 1980s salary tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 exchange. The 1031 property exemption adds stability to the real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can only be levied for a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase owing money there does not way the states will survive economically any massive development of tax gains. The only way you can to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for the 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 dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the guts class far offset the deductions by high income earners.
Today plenty of the freed income from the upper income earner leaves the country for investments in China and the EU at the expense among the US economic state. Consumption tax polices beginning regarding 1980s produced a massive increase planet 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 among the US and reducing the tax base at a time full when debt and a maturing 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 with a length associated with your capital is invested the number of forms can be reduced to a couple of pages.