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 credits. Tax credits such as those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a kid deduction the max of three younger children. The country is full, encouraging large families is carry.
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 world will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for educational costs and interest on so to speak .. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing solutions. The cost on the job is mainly the repair off ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s the income tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds should be deductable merely taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can simply be levied as the percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase with debt there does not way the states will survive economically with no massive increase in tax profits. The only way possible to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% for top level income earners. The Online Tax Return Filing India code literally forced great 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 twin impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the guts class far offset the deductions by high income earners.
Today lots of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense for the US economic state. Consumption tax polices beginning in the 1980s produced a massive increase planet 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 in 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 making up investment profits which are taxed at a capital gains rate which reduces annually based with a length of energy capital is invested quantity of forms can be reduced along with couple of pages.