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 at the expense of the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to a max of three children. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of structure industry.
Allow deductions for education costs and interest on figuratively speaking. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing solutions. The cost at work is mainly the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s revenue 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 Online GST Registration in Pune Maharashtra stocks and bonds in order to be deductable only taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in the red there is very little way us states will survive economically your massive take up tax revenues. The only way possible to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s taxes rates approached 90% for top level 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 guts class far offset the deductions by high income earners.
Today via a tunnel the freed income from the upper income earner has left the country for investments in China and the EU at the expense with the US economy. Consumption tax polices beginning planet 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were excessively 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 a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based on the length associated with your capital is invested amount of forms can be reduced along with couple of pages.