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 snack bars. Tax credits while those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to a max of three children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on so to speak .. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing materials. The cost on the job is partly the upkeep of ones health.
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 focused. 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 All investment in stocks and bonds ought to deductable just taxed when money is withdrawn out from the investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 real estate exemption adds stability for the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied as a percentage of GDP. Quicker GDP grows the more government’s chance to tax. Because of stagnate economy and the exporting of jobs along with the massive increase owing money there is limited way us states will survive economically with no massive trend of tax proceeds. The only way you can to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% for top level 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 skyrocketing GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the guts class far offset the deductions by high income earners.
Today much of the freed income from the upper Online Income Tax Return Filing India earner leaves the country for investments in China and the EU in the expense among the US current economic crisis. Consumption tax polices beginning regarding 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 of 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 duty. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based on the length of capital is invested variety of forms can be reduced using a couple of pages.