Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits 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 for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three of their own kids. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In case 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 durable industry.
Allow deductions for education costs and interest on so to speak .. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and GST Registration online pune Maharashtra health insurance. In business one deducts the price producing materials. The cost at work is in part the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s the income tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 pass on. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can only be levied for a percentage of GDP. The faster GDP grows the greater the government’s ability to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in the red there does not way united states will survive economically any massive take up tax earnings. 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% to your advantage 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 growing GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense for the US financial system. Consumption tax polices beginning in the 1980s produced a massive increase regarding 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 in the US and reducing the tax base at a period when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based around the length associated with your capital is invested the amount of forms can be reduced along with couple of pages.