Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often breaks have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax loans. Tax credits because those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction in order to some max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. When 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 layout industry.
Allow deductions for education costs and interest on student loans. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing goods. The cost of labor is in part the repair 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 tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading partners. The stagnating economy and the ballooning trade deficit are symptoms of consumption tax policies.
Eliminate 401K and IRA programs. All investment Online GST Registration in Pune Maharashtra stocks and bonds always be deductable and only taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can be levied as a percentage of GDP. Quicker GDP grows the more government’s option to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is limited way the us will survive economically without a massive take up tax proceeds. The only way you can to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% for top income earners. The tax code literally forced great living 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the guts class far offset the deductions by high income earners.
Today via a tunnel the freed income from the upper income earner has left the country for investments in China and the EU at the expense for the US economic state. Consumption tax polices beginning in the 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were too often manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector among the US and reducing the tax base at a period when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed at capital gains rate which reduces annually based upon the length of your capital is invested the number of forms can be reduced to a couple of pages.