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 credit. Tax credits while those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to be able to max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on student loans. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing everything. The cost of employment is partially the maintenance 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 earnings tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent for the real estate’s 1031 pass on. The 1031 marketplace exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can only be levied being a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase with debt there isn’t really way the us will survive economically your massive trend of tax earnings. The only way possible to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% for the top income earners. The tax code literally forced huge salary 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 accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income around the upper income earner has left the country for investments in China and the EU in the expense for the US financial system. 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 an occasion when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based around the length associated with your capital is invested quantity of forms can be reduced together with a couple of pages.