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 in the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction to be able to max of three small. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. When 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 education 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 associated with producing goods. The cost at work is in part the upkeep of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s revenue tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn over investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 trading. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as being a percentage of GDP. The faster GDP grows the more government’s capacity to efile Tax Return India. Due to the stagnate economy and the exporting of jobs along with the massive increase owing money there isn’t really way the us will survive economically your massive development of tax profits. The only possible way to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% to your advantage 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 twin impact of skyrocketing GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the very center class far offset the deductions by high income earners.
Today via a tunnel the freed income from the upper income earner leaves the country for investments in China and the EU at the expense of this US economy. Consumption tax polices beginning inside 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 India blighting the manufacturing sector from the US and reducing the tax base at a period 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 around the length of capital is invested variety of forms can be reduced using a couple of pages.