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 such as those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on student education loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing goods. The cost on the job is in part the maintenance of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s revenue tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn over investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied being a percentage of GDP. Quicker GDP grows the greater the government’s chance to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way the states will survive economically without a massive increase in tax profits. The only way you can to increase taxes through using encourage an enormous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% for top level 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 had the twin impact of growing GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income out of your upper income earner has left the country for investments in China and the EU in the expense with the US economic state. Consumption tax polices beginning regarding 1980s produced a massive increase planet 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 Online ITR Filing India blighting the manufacturing sector among 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 duty. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based around the length of your capital is invested amount of forms can be reduced together with a couple of pages.