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 of the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three the children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for educational costs and interest on student education loans. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing materials. The cost of labor is partly 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 for the 1980s salary 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 All investment in stocks and bonds ought to deductable in support taxed when money is withdrawn out from the investment niches. The stock and bond markets have no equivalent on the real estate’s 1031 flow. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. The faster GDP grows the more government’s option to tax. Within the stagnate economy and the exporting of jobs along with the massive increase with debt there is limited way the usa will survive economically with massive trend of tax revenues. The only way you can to increase taxes is encourage a massive increase in GDP.
Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% for File GSTR 1 Online the top income earners. The tax 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 dual impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today plenty of the freed income around the upper income earner has left the country for investments in China and the EU at the expense of the US financial system. Consumption tax polices beginning inside the 1980s produced a massive increase a 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 of 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 tax. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based upon the length of your capital is invested amount of forms can be reduced using a couple of pages.