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 attributes. Tax credits such as 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 your son or daughter deduction to a max of three children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for educational costs and interest on student loans. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing goods. The cost of training is partially the maintenance of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 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 All investment in stocks and bonds ought to deductable in support taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 property exemption adds stability to the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied being a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase owing money there is limited way the usa will survive economically any massive increase online itr filing In india tax revenues. The only possible way to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for top level 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 dual impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the middle class far offset the deductions by high income earners.
Today plenty of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense with the US financial system. Consumption tax polices beginning globe 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in 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 duty. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based around the length of capital is invested the amount of forms can be reduced together with a couple of pages.