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 snack bars. Tax credits because those for online gst registration maharashtra race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a child deduction the max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership 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 market industry.
Allow deductions for educational costs and interest on student loans. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing everything. The cost at work is mainly the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s revenue tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds always be deductable just taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can essentially levied as being a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in the red there is limited way united states will survive economically any massive trend of tax proceeds. The only way you can to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. During the 1950-60s taxes rates approached 90% to find 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner leaves the country for investments in China and the EU in the expense among the US economic state. Consumption tax polices beginning inside the 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a period 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 from a capital gains rate which reduces annually based on the length of energy capital is invested variety of forms can be reduced using a couple of pages.