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 pertaining to instance those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a kid deduction in order to some max of three children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. In the event 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 loans. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing everything. The cost on the job is partly the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s salary tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn using the investment areas. The stock and bond markets have no equivalent on the real estate’s 1031 flow. The 1031 marketplace 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 for a percentage of GDP. The faster GDP grows the more government’s ability to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in debt there does not way us states will survive economically with massive development of tax gains. The only way you can to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% for top income earners. The tax code literally forced comfortable 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 growing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense of the US economy. Consumption tax polices beginning regarding 1980s produced a massive increase a 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 India Tax Return Online blighting the manufacturing sector among the US and reducing the tax base at a period when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for comprising investment profits which are taxed at capital gains rate which reduces annually based around the length of energy capital is invested variety of forms can be reduced along with couple of pages.