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 snack bars. Tax credits while those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three younger children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on student loan. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing wares. The cost at work is mainly the maintenance of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 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 All investment in stocks and bonds ought to deductable and only taxed when money is withdrawn among the investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied as a percentage of GDP. Quicker GDP grows the more government’s option to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in difficulty there is very little way us states will survive economically with no massive take up tax profits. The only possible way to increase taxes through using encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% for the top income earners. The tax code literally forced great 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 the growing middle-class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income around the upper income earner has left the country for investments in China and the EU at the expense with the US financial system. 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 Tax Return Online blighting the manufacturing sector from the US and reducing the tax base at a time full when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based on the length of capital is invested amount of forms can be reduced to a couple of pages.