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 pertaining to instance those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to a max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Owning a home 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 loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing materials. The cost on the job is in part the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s salary tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds ought to deductable only taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. The faster GDP grows the more government’s chance to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase owing money there does not way the usa will survive economically with no massive trend of tax gains. The only way you can to increase taxes is to encourage a massive increase Online GST Registration in Pune Maharashtra GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% to find income earners. The tax code literally forced comfortable 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 growing GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.
Today lots of the freed income from the upper income earner leaves the country for investments in China and the EU in the expense of the US economic state. Consumption tax polices beginning inside the 1980s produced a massive increase regarding 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 among the US and reducing the tax base at an occasion when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for accounting for investment profits which are taxed in a very capital gains rate which reduces annually based around the length of energy capital is invested the amount of forms can be reduced using a couple of pages.