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 credits. Tax credits while those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction together with a max of three 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 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 figuratively speaking. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing materials. The cost at work 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 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 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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn over investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can be levied for a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in debt there does not way the usa will survive economically with no massive development of tax proceeds. The only way possible to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s taxes rates approached 90% for top level 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 File GSTR 3b Online other investments against earned income had the twin impact of growing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income out of your upper income earner has left the country for investments in China and the EU at the expense among the US method. Consumption tax polices beginning planet 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector belonging to the US and reducing the tax base at a period when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based using a length of energy capital is invested amount of forms can be reduced along with couple of pages.