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 pertaining to instance those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three small. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for educational costs and interest on student loans. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing goods. The cost of training is partly the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s the income tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can simply be levied being a percentage of GDP. Quicker GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in the red there does not way united states will survive economically any massive craze of tax proceeds. The only way you can to increase taxes end up being encourage an enormous increase in GDP.
Encouraging Domestic Investment. Your 1950-60s Online Income Tax Return Filing India tax rates approached 90% to your advantage 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 developed the tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed income around the upper income earner has left the country for investments in China and the EU in the expense among the US financial system. Consumption tax polices beginning regarding 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were too often manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a time when debt and an aging 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 on the length of time capital is invested the number of forms can be reduced using a couple of pages.