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 in 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 younger 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 your mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for expenses and interest on student education loans. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing wares. The cost of training is in part 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 earnings tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent to the real estate’s 1031 pass on. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can essentially levied as being a percentage of GDP. Quicker GDP grows the more government’s option to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in the red there is no way the us will survive economically with massive increase in tax gains. The only way you can to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% to find income earners. The tax code literally forced financial security 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 efile Tax Return India revenue from the middle class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper income earner has left the country for investments in China and the EU at the expense of the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase in 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 in the US and reducing the tax base at an occasion when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based on the length associated with your capital is invested the number of forms can be reduced together with a couple of pages.