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 at the expense among the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to a max of three younger children. The country is full, encouraging large families is carry.
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 country will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for expenses and interest on student loans. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing wares. The cost on the job is mainly the repair off ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s the income tax code was investment oriented. Today it is consumption oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds ought to deductable only taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent on the real estate’s 1031 exchange. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to be used for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. Quicker GDP grows the more government’s capability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase owing money there is no way the states will survive economically with massive development of tax revenues. The only possible way to increase taxes through using encourage an enormous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced huge salary 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 growing GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the guts class far offset the deductions by high income earners.
Today plenty of the freed income around the upper income earner leaves the country for Online Gst Registration Pune investments in China and the EU at the expense with the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were excessively 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 period of time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed at capital gains rate which reduces annually based using a length of time capital is invested the amount of forms can be reduced to a couple of pages.