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 with regard to example those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a child deduction the max of three children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In case 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 educational costs and interest on figuratively speaking. 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 solutions. The cost of training is simply the upkeep of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s earnings tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds always be deductable only taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied for a percentage of GDP. Quicker GDP grows the more government’s option to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in the red there isn’t really way united states will survive economically your massive development of tax gains. The only possible way to increase taxes is encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% for the 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 accelerating GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper income earner leaves the country for investments in China and the EU in the expense among 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 constantly manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector belonging to the US and reducing the tax base at a time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for Online GST Registration Pune Maharashtra accounting for investment profits which are taxed at capital gains rate which reduces annually based on the length associated with your capital is invested variety of forms can be reduced along with couple of pages.