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 on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction together with a max of three small. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for educational costs and interest on student loan. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing goods. The cost of labor is mainly the upkeep of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s earnings 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 All investment in stocks and bonds in order to deductable only taxed when money is withdrawn out from the investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can only be levied as being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase owing money there is no way us states will survive economically with massive craze of tax revenues. The only way possible to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% for top income earners. The tax code literally forced financial security 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 come up with tax revenue from the guts class far offset the deductions by high income earners.
Today via a tunnel the freed income around the upper income earner leaves the country for investments in China and the EU in the expense for the US method. Consumption tax polices beginning inside the 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were excessively manufactured off shore. Today capital is fleeing to China and Online ITR Return File India blighting the manufacturing sector of the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for comprising investment profits which are taxed at a capital gains rate which reduces annually based with a length of energy capital is invested amount of forms can be reduced along with couple of pages.