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. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to be able to max of three younger children. 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 country will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for educational costs and interest on student education loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing materials. The cost at work is mainly the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s earnings tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent for the real estate’s 1031 flow. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. The faster GDP grows the more government’s chance to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in the red there is no way united states will survive economically with massive trend of tax gains. The only possible way to increase taxes through using encourage an enormous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% for top level 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 other investments against earned income had the twin impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the very center class far offset the deductions by high income earners.
Today almost all of the freed income out of your upper income earner leaves the country for investments in China and the EU at the expense among the US economic state. Consumption tax polices beginning planet 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 Online ITR Filing India blighting the manufacturing sector in the US and reducing the tax base at a period of time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based with a length of capital is invested variety of forms can be reduced to a couple of pages.