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 in the expense for this many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to a max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and Online Gst Registration Pune Maharashtra interrupt the recovery of durable industry.
Allow deductions for education costs and interest on student loans. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing solutions. The cost of labor is simply the repair off ones health.
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 focused. 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 All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn using the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can simply be levied as being a percentage of GDP. Quicker GDP grows the greater the government’s ability to tax. Given the stagnate economy and the exporting of jobs along with the massive increase with debt there does not way the us will survive economically with massive trend of tax gains. The only way you can to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to your advantage 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 come up with tax revenue from the guts 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 in the expense among the US method. Consumption tax polices beginning globe 1980s produced a massive increase a 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 among the US and reducing the tax base at a time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based on the length of capital is invested the number of forms can be reduced to a couple of pages.