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 because those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a kid deduction in order to some max of three children. The country is full, encouraging large families is pass.
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, a rural area will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on so to speak .. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing solutions. The cost on the job is partially 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 to 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 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 All investment in stocks and bonds ought to deductable merely taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent on the real estate’s 1031 give eachother. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can be levied as being a percentage of GDP. The faster GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase owing money there is limited way us states will survive economically your massive increase in tax revenues. The only way possible to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% to your advantage 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 growing GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income around the upper efile Income Tax Return in India earner leaves the country for investments in China and the EU at the expense with the US current economic crisis. Consumption tax polices beginning regarding 1980s produced a massive increase inside of 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 in the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for making up investment profits which are taxed at a capital gains rate which reduces annually based on the length of energy capital is invested the amount of forms can be reduced together with a couple of pages.