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 for this many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three of their own kids. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on figuratively speaking. Online IT Return Filing India is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing materials. The cost of training is simply the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s the income tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds always be deductable in support taxed when money is withdrawn using the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied being a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is no way united states will survive economically any massive trend of tax profits. The only possible way to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s taxes rates approached 90% for the top income earners. The tax code literally forced high income 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 growing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the guts class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner has left the country for investments in China and the EU at the expense of the US economic state. Consumption tax polices beginning regarding 1980s produced a massive increase inside of the 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 from 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 in taxes. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based upon the length associated with your capital is invested the amount of forms can be reduced any couple of pages.