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 loans. Tax credits while 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 the youngster deduction to be able to max of three of their own kids. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Home ownership 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 layout industry.
Allow deductions for education costs and interest on student loan. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing wares. The cost of employment is partially the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. The faster GDP grows the more government’s capability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase owing money there is no way the states will survive economically your massive trend of tax revenues. The only way possible to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% to find 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 Online GST Registration Pune Maharashtra other investments against earned income had the dual impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.
Today almost all of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense of the US method. Consumption tax polices beginning globe 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 India blighting the manufacturing sector from the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based using a length associated with your capital is invested quantity of forms can be reduced to a couple of pages.