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 loans. Tax credits with regard to example 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 child deduction in order to some max of three children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for educational costs and interest on figuratively speaking. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing goods. The cost of labor is simply the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary 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 All investment in stocks and bonds should be deductable and only taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
GDP and File GSTR 1 Online Taxes. Taxes can fundamentally be levied being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in the red there is limited way us states will survive economically without a massive take up tax gains. The only way possible to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% for top 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the very center class far offset the deductions by high income earners.
Today almost all of the freed income around the upper income earner has left the country for investments in China and the EU in the expense of this US method. Consumption tax polices beginning regarding 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 of the US and reducing the tax base at a period of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based upon the length of your capital is invested variety of forms can be reduced together with a couple of pages.