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 credit. 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 the youngster deduction together with a max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for expenses and interest on so to speak .. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing everything. The cost of training is in part 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 the income tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading young partners. 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can only be levied being a percentage of GDP. Quicker GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs along with the massive increase owing money there is very little way the usa will survive economically without a massive craze of tax revenues. The only way possible to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% to find income earners. The tax code literally forced huge salary 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 skyrocketing 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 plenty of the freed income off the upper income earner has left the country for investments Online GST registration in Mumbai Maharashtra China and the EU at the expense among the US economic state. Consumption tax polices beginning planet 1980s produced a massive increase in 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 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 place a burden on. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based on the length of capital is invested the number of forms can be reduced together with a couple of pages.