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 attributes. 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 the youngster deduction the max of three children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on student education loans. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing wares. The cost at work is in part the maintenance of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments Online GST registration in Mumbai Maharashtra America”. Prior on the 1980s earnings 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 All investment in stocks and bonds should be deductable only taxed when money is withdrawn from the investment niches. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 real estate exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as the percentage of GDP. The faster 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 isn’t really way the usa will survive economically with massive take up tax proceeds. The only way possible to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for top level income earners. The tax code literally forced high income 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 accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income off the upper income earner leaves the country for investments in China and the EU in the expense with the US economic state. Consumption tax polices beginning inside the 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector of the US and reducing the tax base at a time full 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 on the capital gains rate which reduces annually based using a length of energy capital is invested the amount of forms can be reduced any couple of pages.