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 such as those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to a max e file of Income Tax Return India three the children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for expenses and interest on figuratively speaking. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing wares. The cost at work is simply the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 friends. 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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. Quicker GDP grows the more government’s chance to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase owing money there does not way the us will survive economically with massive trend of tax earnings. The only way you can to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% to find 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 accelerating GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the guts class far offset the deductions by high income earners.
Today plenty of the freed income from the upper income earner has left the country for investments in China and the EU in the expense with the US financial system. Consumption tax polices beginning in the 1980s produced a massive increase regarding 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 of the US and reducing the tax base at an occasion when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed at a capital gains rate which reduces annually based on the length associated with your capital is invested amount of forms can be reduced any couple of pages.