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 among 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 small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on student loans. It pays to 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 at work is partially the repair of ones health.
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 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in stocks and bonds Online GST Registration in Mumbai Maharashtra order to deductable and only taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 trading. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied as being a percentage of GDP. Quicker GDP grows the greater the government’s chance to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is limited way the usa will survive economically without a massive craze of tax revenues. The only way you can to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% for top 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 dual impact of accelerating 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 lots of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense among the US economy. Consumption tax polices beginning globe 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were excessively 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 period when debt and an aging 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 using a length of energy capital is invested the amount of forms can be reduced along with couple of pages.