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 loans. Tax credits while those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three the 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 the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on figuratively speaking. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing goods. The cost of labor is partially the repair off ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s salary tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds always be deductable just taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied being a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in the red there does not way united states will survive economically without a massive craze of tax earnings. The only way you can to increase taxes through using encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% to find 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 come up with tax revenue from the middle 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 at the expense with the US financial system. Consumption tax polices beginning in the 1980s produced a massive increase regarding 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 Online ITR Return India blighting the manufacturing sector among 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 duty. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based using a length of energy capital is invested the number of forms can be reduced any couple of pages.