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 attributes. 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 to a max of three the children. 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, the country will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for educational costs and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing solutions. The cost of employment is simply the upkeep of ones nicely.
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 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 All investment in stocks and bonds ought to deductable just taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 give eachother. The 1031 real estate exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied being a percentage of GDP. The faster GDP grows the more government’s option to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there does not way the us will survive economically your massive trend of tax earnings. The only way you can to increase taxes through using encourage huge 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 dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the very center class far offset the deductions by high income earners.
Today lots of the freed Online Income Tax Return Filing India around the upper income earner has left the country for investments in China and the EU in the expense of the US method. Consumption tax polices beginning regarding 1980s produced a massive increase in the 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 tax bill. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based around the length of time capital is invested the number of forms can be reduced along with couple of pages.