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 while those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. So here is 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 overlook.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If your 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 is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing wares. The cost on the job is in part the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s revenue tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn out from the investment markets. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can be levied as being a percentage of GDP. The faster GDP grows the greater the government’s chance to tax. Within the stagnate economy and the exporting of jobs along with the massive increase with debt there isn’t really way the usa will survive economically any massive development of tax profits. The only way you can to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% for top level efile Income Tax Return in India 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 twin impact of growing 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 the US economy. 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 of the US and reducing the tax base at a period of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based on the length of capital is invested amount of forms can be reduced along with couple of pages.