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 because those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on so to speak .. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing goods. The cost at work 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 for the 1980s the income tax code was investment oriented. Today it is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent towards the real estate’s 1031 give eachother. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. The faster GDP grows the greater the government’s chance to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase with debt there is very little way us states will survive economically your massive increase in tax earnings. The only way you can to increase taxes would be to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% for the top income earners. The tax code literally forced high Online Income Tax Return India 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 skyrocketing 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 much of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense among the US financial system. Consumption tax polices beginning planet 1980s produced a massive increase regarding 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 an occasion 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 capital gains rate which reduces annually based with a length of energy capital is invested amount of forms can be reduced using a couple of pages.