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 attributes. Tax credits while 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 your son or daughter deduction to be able to max of three of their own kids. The country is full, encouraging large families is successfully pass.
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, the uk will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for education costs and interest on student loans. It is advantageous 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 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 earnings tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn using the investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. The faster GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase owing money there is no way the usa will survive economically any massive take up tax revenues. The only way possible to increase taxes end up being encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s 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 dual impact of growing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed Online Income Tax Return India contrary to the upper income earner leaves the country for investments in China and the EU at the expense for the US current economic crisis. Consumption tax polices beginning globe 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 when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based on the length of your capital is invested variety of forms can be reduced together with a couple of pages.