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 credit. Tax credits because those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the child deduction together with a max of three younger children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for education 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 price producing materials. The cost of employment is partly the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s earnings tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds ought to deductable merely taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 industry exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can be levied being a percentage of GDP. The faster GDP grows the greater the government’s ability to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in the red there does not way the states will survive economically with massive increase in tax profits. The only way you can to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the very center class far offset the deductions by high income earners.
Today much of the freed income from the upper income earner has left the country for investments in China and the EU in the expense for the US financial system. Consumption tax polices beginning globe 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were too often manufactured off shore. Today capital is fleeing to China and Online ITR Return Filing India blighting the manufacturing sector among the US and reducing the tax base at a time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for making up investment profits which are taxed at capital gains rate which reduces annually based upon the length of capital is invested the number of forms can be reduced any couple of pages.