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 pertaining to instance those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to a max of three children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on figuratively speaking. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing goods. The cost at work is in part the upkeep of ones fitness.
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 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can simply be levied for a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase owing money there is very little way us states will survive economically with massive increase in tax proceeds. The only way you can to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% to find income 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 dual impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.
Today lots of the freed income contrary to the upper income earner leaves the country for investments in China and the EU at the expense of this US economy. Consumption tax polices beginning in the 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and Online ITR Return Filing India blighting the manufacturing sector belonging to 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 making up investment profits which are taxed at capital gains rate which reduces annually based with a length of time capital is invested the number of forms can be reduced to a couple of pages.