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 credit. Tax credits such as those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction together with a max of three younger children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for expenses and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing everything. The cost at work is partly the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s revenue tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds should be deductable and only taxed when money is withdrawn using the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 flow. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can be levied as the percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in the red there does not way the us will survive economically without a massive trend of tax proceeds. The only possible way to increase taxes is to encourage an enormous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% to find 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 e file of Income Tax Return in India accelerating GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income out of your upper income earner leaves the country for investments in China and the EU in the expense with the US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector from the US and reducing the tax base at an occasion when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based using a length associated with your capital is invested variety of forms can be reduced any couple of pages.