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 while those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three of their own kids. The country is full, File GSTR 1 Online encouraging large families is successfully pass.
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 durable industry.
Allow deductions for educational costs and interest on student loan. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing solutions. The cost of labor is partly the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s revenue tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 flow. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. Given the stagnate economy and the exporting of jobs along with the massive increase with debt there is very little way the us will survive economically without a massive trend of tax earnings. The only possible way to increase taxes end up being encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% to your advantage income earners. The tax code literally forced great 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 tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense of this US economic state. Consumption tax polices beginning in the 1980s produced a massive increase planet 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 in taxes. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based with a length of energy capital is invested the number of forms can be reduced along with couple of pages.