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 while those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction in order to some max of three children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If the 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 so to speak .. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing wares. The cost on the job is simply the repair of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s the income tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn over investment areas. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 real estate exemption adds stability for the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can only be levied for a percentage of GDP. The faster GDP grows the more government’s ability to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is limited way united states will survive economically any massive trend of tax gains. The only way you can to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% to your advantage income earners. The tax code literally forced great 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 skyrocketing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income off the upper income earner has left the country for investments in China and the EU in the expense of this US economic state. Consumption tax polices beginning planet 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were too often manufactured off shore. Today capital is fleeing to China and Online ITR Return File India blighting the manufacturing sector belonging to the US and reducing the tax base at a period of time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for comprising investment profits which are taxed at capital gains rate which reduces annually based on the length of capital is invested quantity of forms can be reduced using a couple of pages.