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 snack bars. Tax credits such as those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction the max of three younger 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. If the mortgage deduction is eliminated, as the President’s council suggests, GST Application Mumbai Maharashtra the will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for education costs and interest on student education loans. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing everything. The cost of employment is partially the upkeep of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s the income tax code was investment oriented. Today it is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds ought to deductable in support taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can only be levied as the percentage of GDP. Quicker GDP grows the greater the government’s chance to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is no way us states will survive economically without a massive craze of tax profits. The only way possible to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% to find 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 twin impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today much of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense of this US method. Consumption tax polices beginning planet 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based with a length of capital is invested the amount of forms can be reduced along with couple of pages.