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 on the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction the 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 the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for education costs and interest on student loan. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing everything. The cost on the job is in part the upkeep of 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 salary tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 industry exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can essentially levied for a percentage of GDP. Quicker GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way the states will survive economically any massive development of tax profits. The only possible way to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for top 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 twin impact of growing GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.
Today almost all of the freed income off the upper income earner has left the country for investments in China and the EU at the expense with the US method. Consumption tax polices beginning inside the 1980s produced a massive increase in the 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 ITR Filing India blighting the manufacturing sector among the US and reducing the tax base at a period of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based around the length of capital is invested the number of forms can be reduced to a couple of pages.