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 pertaining to instance those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Is included in a 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. Proudly owning strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for expenses and interest on so to speak .. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing materials. The cost at work is in part 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 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 All investment in stocks and bonds ought to deductable merely taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent on the real estate’s 1031 pass on. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. Quicker GDP grows the greater the government’s option to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in difficulty there does not way us states will survive economically with no massive development of tax revenues. The only way you can to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% for top level 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 skyrocketing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today plenty of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense of this US economy. Consumption tax polices beginning in the 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 among the US and Online GST Return Filing reducing the tax base at a period when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based using a length of time capital is invested the number of forms can be reduced to a couple of pages.