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 loans. Tax credits pertaining to instance those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction the max of three of their own kids. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on figuratively speaking. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing everything. The cost at work is partially the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s earnings tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds should be deductable only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 trading. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as 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 in debt there isn’t really way the us will survive economically with massive trend of tax earnings. The only possible way to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income efile Tax Return India rates approached 90% to find 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 skyrocketing GDP while providing jobs for the growing middle class. As jobs were developed the tax revenue from the guts 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 in China and the EU at the expense of the US method. Consumption tax polices beginning globe 1980s produced a massive increase regarding 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 among the US and reducing the tax base at an occasion when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based with a length associated with your capital is invested the number of forms can be reduced using a couple of pages.