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 pertaining to instance those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Need to 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 overlook.
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, a rural area will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on so to speak .. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing materials. The cost of labor is in part the upkeep of ones very well being.
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 All investment in stocks and bonds in order to deductable in support taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 flow. The 1031 marketplace exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. Quicker GDP grows the more government’s option to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is no way the usa will survive economically your massive craze of tax proceeds. The only way you can to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% to find income earners. The tax code literally forced high income earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned Income Tax Rates India 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 leaves the country for investments in China and the EU at the expense for the US economy. Consumption tax polices beginning in the 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were more often than not 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 period of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based around the length of time capital is invested the amount of forms can be reduced together with a couple of pages.