Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits 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 belonging to the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce the child deduction together with a max of three small. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on figuratively speaking. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing everything. The cost on the job is mainly the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s earnings tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn from the investment areas. The stock and bond markets have no equivalent to the real estate’s 1031 give eachother. The 1031 property exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as a percentage of GDP. The faster GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is very little way us states will survive economically your massive take up tax profits. The only possible way to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% for top level 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 dual impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed income from the upper income earner leaves the country for investments in China and the EU in the expense of the US current economic crisis. Consumption tax polices beginning regarding 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were excessively manufactured off shore. Today capital is fleeing to China and Online ITR Return India blighting the manufacturing sector of the US and reducing the tax base at a time full when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based with a length of energy capital is invested the amount of forms can be reduced together with a couple of pages.