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 attributes. Tax credits while those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the child deduction in order to some max of three small. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for education costs and interest on so to speak .. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing goods. The cost of training is simply the maintenance of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s the income tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent towards the real estate’s 1031 flow. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. The faster GDP grows the greater the government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase owing money there isn’t really way united states will survive economically without a massive increase in tax earnings. The only way you can to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for the top income earners. The tax code literally forced great living 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.
Today via a tunnel the freed income around the upper income earner has left the country for investments in China and the EU at the expense for the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase planet 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 among the US and reducing the tax base at a period of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for making up investment profits which are taxed at a capital gains rate which reduces annually based using a length of time capital is invested quantity of forms can be reduced using a couple of pages.