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 in the expense among the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a kid deduction in order to some max of three children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for education costs and interest on student loan. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing wares. The cost at work is in part 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 into the 1980s the income Online Tax Return Filing India code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can be levied for a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is limited way us states will survive economically any massive development of tax revenues. The only way you can to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax 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 come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today much 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 economic state. Consumption tax polices beginning globe 1980s produced a massive increase planet 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 of the US and reducing the tax base at a time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based around the length associated with your capital is invested variety of forms can be reduced along with couple of pages.