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 snack bars. Tax credits while those for race horses benefit the few in the expense among the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three small. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for educational costs and interest on so to speak .. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing materials. The cost at work is partly the maintenance 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 All investment in stocks and bonds always be deductable just taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can fundamentally be levied for a percentage of GDP. Quicker GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is limited way the usa will survive economically without a massive increase in tax earnings. The only possible way to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% for top 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 dual impact of growing 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 lots of the freed income off the upper income earner has left the country for investments in China and the EU at the expense for the US financial system. Consumption tax polices beginning in the 1980s produced a massive increase a demand for Online GST Registration Pune 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 of 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 in taxes. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based upon the length of time capital is invested the amount of forms can be reduced to a couple of pages.