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 attributes. Tax credits pertaining to instance those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three of their own kids. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for expenses and interest on student education loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing wares. The cost of training is partly the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent for the real estate’s 1031 pass on. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. The faster GDP grows the greater the government’s capability to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase owing money there is very little way united states will survive economically with no massive trend of tax earnings. The only way possible to increase taxes would be to encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% to find 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 Online Income Tax Return India had the twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the very center class far offset the deductions by high income earners.
Today plenty of the freed income off the upper income earner leaves the country for investments in China and the EU at the expense among the US economy. Consumption tax polices beginning planet 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 of the US and reducing the tax base at a 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 at a capital gains rate which reduces annually based using a length of your capital is invested variety of forms can be reduced along with couple of pages.