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 credit. Tax credits with regard to example those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a child deduction the max of three children. The country is full, encouraging large families is pass.
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 layout industry.
Allow deductions for expenses and interest on figuratively speaking. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing goods. The cost of employment 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 to the 1980s revenue tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable and only taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in debt there isn’t really way the usa will survive economically with massive development of tax proceeds. The only possible way to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for top 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 Online GST Registration Pune Maharashtra other investments against earned income had the dual impact of growing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.
Today via a tunnel the freed income out of your upper income earner leaves the country for investments in China and the EU in the expense among the US economy. Consumption tax polices beginning inside the 1980s produced a massive increase a 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 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 in taxes. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based with a length of your capital is invested amount of forms can be reduced together with a couple of pages.