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 at the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three small. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on student loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing everything. The cost of labor is partially the repair off ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s revenue tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 flow. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can only be levied being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in debt there does not way the us will survive economically without a massive craze of tax earnings. The only possible way to increase taxes would be to encourage an enormous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% for top income earners. The tax code literally forced financial security earners to “Invest Online GST Registration in Mumbai Maharashtra 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 created the tax revenue from the middle class far offset the deductions by high income earners.
Today via a tunnel the freed income from the upper income earner has left the country for investments in China and the EU at the expense with the US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were excessively 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 time full when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for comprising investment profits which are taxed at a capital gains rate which reduces annually based around the length associated with your capital is invested the amount of forms can be reduced together with a couple of pages.