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 loans. Tax credits pertaining to instance those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three of their own kids. 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, the will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for education costs and interest on so to speak .. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and Online GST Pune Maharashtra insurance coverage. In business one deducts the price producing solutions. The cost of training is mainly the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s earnings tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn using the investment niches. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied being a percentage of GDP. The faster GDP grows the greater the government’s option to tax. Because of stagnate economy and the exporting of jobs along with the massive increase owing money there does not way the usa will survive economically with massive increase in tax earnings. The only possible way to increase taxes end up being encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% to your advantage 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 developed the tax revenue from the middle class far offset the deductions by high income earners.
Today plenty of the freed income around the upper income earner has left the country for investments in China and the EU at the expense for the US economy. Consumption tax polices beginning planet 1980s produced a massive increase inside of the 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 a period of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based on the length of capital is invested the number of forms can be reduced along with couple of pages.