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 loans. Tax credits pertaining to instance those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to a max of three of their own kids. 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 the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on student loans. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing solutions. The cost of labor is simply the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s revenue tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 industry exemption adds stability for 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 chance to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in the red there does not way us states will survive economically any massive trend of tax gains. The only way you can to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% for the top efile Income Tax India earners. The tax code literally forced great living 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 growing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the very center class far offset the deductions by high income earners.
Today almost all 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 economy. Consumption tax polices beginning regarding 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector from the US and reducing the tax base at an occasion when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for comprising investment profits which are taxed at capital gains rate which reduces annually based on the length of your capital is invested amount of forms can be reduced along with couple of pages.