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 with regard to example those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction together with a max of three children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Owning 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 education costs and interest on student loans. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing materials. The cost of employment is simply the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s revenue tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent to the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as the percentage of GDP. Quicker GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in difficulty there isn’t really way united states will survive economically any massive craze of tax gains. The only way you can to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for the top income earners. The tax code literally forced high income 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 plenty of the freed income out of your upper income earner leaves the country for investments in China and the EU at the expense of this US economic state. Consumption tax polices beginning regarding 1980s produced a massive increase in the 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 belonging to the US and reducing the tax base at a time full when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based upon the length of your capital is invested variety of forms can be reduced together with a couple of pages.