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 credits. Tax credits with regard to example those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce a kid deduction together with a max of three small. 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. 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 structure industry.
Allow deductions for expenses and interest on student loan. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and Online GST Registration Pune Maharashtra insurance policy. In business one deducts the associated with producing solutions. The cost of employment is simply the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 collaborators. 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn out from the investment markets. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can be levied for a percentage of GDP. The faster GDP grows the greater the government’s capability to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is limited way the us will survive economically your massive trend of tax profits. The only possible way to increase taxes is encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% for top income earners. The tax code literally forced huge salary 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 developed the tax revenue from the very center class far offset the deductions by high income earners.
Today plenty of the freed income off the upper income earner has left the country for investments in China and the EU at the expense with the US method. Consumption tax polices beginning planet 1980s produced a massive increase in the 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 belonging to the US and reducing the tax base at a period when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based with a length of your capital is invested the number of forms can be reduced using a couple of pages.