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 snack bars. Tax credits because those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a child deduction together with a max of three the 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. In the event the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for expenses and interest on student loan. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing goods. The cost of training is mainly the upkeep of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds in order to be deductable and only taxed when money is withdrawn over investment markets. The stock and bond markets have no equivalent on the real estate’s 1031 exchange. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied for a percentage of GDP. The faster GDP grows the more government’s chance to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way the us will survive economically any massive increase in tax gains. The only possible way to increase taxes is to encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% for top 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 income had the twin impact of growing GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the middle class far offset the deductions by high income earners.
Today plenty of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense of this US current economic crisis. Consumption tax polices beginning planet 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and Online ITR Filing 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 in taxes. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based upon the length of capital is invested the number of forms can be reduced to a couple of pages.