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 pertaining to instance those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Must you want 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 overlook.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for educational costs and interest on so to speak .. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing wares. The cost on the job is partially the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s the income tax code was investment oriented. Today it is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn out from the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 give eachother. The 1031 property exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied for a percentage of GDP. The faster GDP grows the more government’s option to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in debt there does not way the usa will survive economically your massive take up tax revenues. The only way possible to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. Your 1950-60s taxes rates approached 90% for top 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 dual 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 much of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense among the US economic state. Consumption tax polices beginning regarding 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury online Goods and service tax registration pune were frequently 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 time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based upon the length associated with your capital is invested the amount of forms can be reduced using a couple of pages.