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 because those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction in order to some max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In the event 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 student loans. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing solutions. The cost of training is simply the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s salary tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading 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 All investment in stocks and bonds in order to deductable only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 marketplace exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as 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 in debt there is very little way the states will survive economically with massive increase in tax revenues. The only possible way to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for top level Online Income Tax Filing India earners. The tax code literally forced comfortable 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 twin impact of growing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.
Today plenty of the freed income contrary to the upper income earner leaves the country for investments in China and the EU at the expense of the US current economic crisis. Consumption tax polices beginning globe 1980s produced a massive increase a 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 of the US and reducing the tax base at a 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 on the capital gains rate which reduces annually based with a length of capital is invested quantity of forms can be reduced together with a couple of pages.