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 snack bars. Tax credits while those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a kid deduction in order to some max of three children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for expenses and interest on student loan. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing goods. The cost of training is partially the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s revenue tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds should be deductable only taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 trading. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can fundamentally be levied for a percentage of GDP. The faster GDP grows the greater the government’s option to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in the red there is limited way us states will survive economically with massive development of tax gains. The only possible way to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% for top 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 dual impact of growing GDP while providing jobs for the growing middle class. As jobs were developed the tax revenue from the very center class far offset the deductions by high income earners.
Today much of the freed income contrary to the upper income earner has left the country for investments in China and the EU at the expense of the US economic state. Consumption tax polices beginning in the 1980s produced a massive increase regarding 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 GST Return Filing India blighting the manufacturing sector of the US and reducing the tax base at a time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based on the length of energy capital is invested variety of forms can be reduced any couple of pages.