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 loans. Tax credits while those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to be able to max of three children. The country is full, encouraging large families is successfully pass.
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 will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for education costs and interest on figuratively speaking. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing wares. The cost of labor is in part the repair off ones fitness.
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 All investment in stocks and bonds in order to be deductable just taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent into the real estate’s 1031 pass on. The 1031 marketplace exemption adds stability for 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. The faster GDP grows the more government’s capacity to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is no way the usa will survive economically with no massive take up tax earnings. The only possible way to increase taxes through using encourage a massive increase Online GST Registration in Mumbai Maharashtra GDP.
Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for the top income earners. The tax code literally forced huge salary 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 skyrocketing 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 for the US economy. Consumption tax polices beginning in the 1980s produced a massive increase regarding 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 among the US and reducing the tax base at a time full 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 from a capital gains rate which reduces annually based upon the length associated with your capital is invested amount of forms can be reduced to a couple of pages.