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 credit. Tax credits because those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a child deduction the max of three small. The country is full, encouraging large families is overlook.
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 world will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on so to speak .. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing solutions. The cost at work is partially the upkeep of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments Online GST Registration In Mumbai Maharashtra America”. Prior for the 1980s revenue tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent for the real estate’s 1031 trading. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase with debt there is limited way the usa will survive economically with massive increase in tax earnings. The only possible way to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for top level 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 twin impact of growing GDP while providing jobs for the growing middle class. As jobs were developed the tax revenue from the very center class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner has left the country for investments in China and the EU in the expense among the US economic state. Consumption tax polices beginning globe 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were excessively 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 a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based upon the length associated with your capital is invested variety of forms can be reduced to a couple of pages.