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 Online GST Registration Maharashtra all tax credits. Tax credits such as those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction together with a max of three of their own kids. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on figuratively speaking. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing materials. The cost on the job is simply the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 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 All investment in stocks and bonds in order to deductable only taxed when money is withdrawn from the investment areas. The stock and bond markets have no equivalent towards the real estate’s 1031 exchange. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as the percentage of GDP. Quicker GDP grows the more government’s chance to tax. Within the stagnate economy and the exporting of jobs along with the massive increase owing money there is very little way the usa will survive economically with massive take up tax revenues. The only way you can to increase taxes would be to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for 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 twin impact of accelerating 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 almost all of the freed income from the upper income earner leaves the country for investments in China and the EU in the expense of this US economic state. Consumption tax polices beginning planet 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were frequently 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 time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based upon the length of energy capital is invested the number of forms can be reduced to a couple of pages.