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 at the expense of the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a child deduction to a max of three younger children. 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 country will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on student loan. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. Online GST registration in Mumbai Maharashtra business one deducts the associated with producing wares. The cost of employment is mainly the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into 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 partners. 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 All investment in stocks and bonds always be deductable just taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to be taken 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 ability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase with debt there does not way the us will survive economically without a massive development of tax proceeds. The only way possible to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% to your advantage 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 came up with tax revenue from the guts class far offset the deductions by high income earners.
Today plenty of the freed income out of your upper income earner has left the country for investments in China and the EU in the expense with the US economy. Consumption tax polices beginning regarding 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were too often 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 an occasion when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. 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 variety of forms can be reduced any couple of pages.