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 credits. Tax credits while those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction the max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on student loan. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing everything. The cost at work is partly the upkeep of ones very well being.
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 young 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn over investment areas. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 marketplace exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can fundamentally be levied as the percentage of GDP. Quicker GDP grows the greater the government’s option to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in debt there does not way united states will survive economically any massive trend of tax proceeds. The only possible way to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced comfortable 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 dual impact of skyrocketing GDP while providing jobs for Gst Registration Online Pune Maharashtra the growing middle class. As jobs were come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today lots of the freed income from the upper income earner has left the country for investments in China and the EU at the expense of this US financial system. Consumption tax polices beginning planet 1980s produced a massive increase a 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 of 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. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based around the length associated with your capital is invested the amount of forms can be reduced together with a couple of pages.