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 credit. Tax credits because those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to be able to max of three small. The country is full, encouraging large families is successfully pass.
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 world will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for education costs and interest on student loan. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing everything. The cost of training is simply the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, Online GST Registration Pune but allow liberal deductions for “investments in America”. Prior for the 1980s the income 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn among the investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as the percentage of GDP. Quicker GDP grows the greater the government’s chance to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way united states will survive economically with no massive take up tax proceeds. The only way possible to increase taxes would be to encourage an enormous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for top level 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 accelerating GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.
Today almost all 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 economy. Consumption tax polices beginning inside the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were more often than not 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 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 at a capital gains rate which reduces annually based using a length associated with your capital is invested quantity of forms can be reduced along with couple of pages.