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 credits. Tax credits while those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If 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 market industry.
Allow deductions for education costs and GST Registration online Mumbai Maharashtra interest on student loans. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing wares. The cost of training is simply the repair off 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 concentrated. 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 All investment in stocks and bonds in order to be deductable and only taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied 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 with debt there is very little way the usa will survive economically without a massive craze of tax revenues. The only way possible to increase taxes through using encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% for top 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 accelerating GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the very center class far offset the deductions by high income earners.
Today plenty of the freed income off the upper income earner leaves the country for investments in China and the EU at the expense of this US economic state. Consumption tax polices beginning inside the 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 among the US and reducing the tax base at an occasion 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 with a length associated with your capital is invested the amount of forms can be reduced using a couple of pages.