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 among the many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction the max of three of their own kids. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on student education loans. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing wares. The cost of training is partly the repair of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading 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 All investment in stocks and bonds always be deductable in support taxed when money is withdrawn out from the investment niches.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 exchange. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can only be levied as a percentage of GDP. Quicker GDP grows the more government’s option to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there isn’t really way the us will survive economically with massive increase in tax profits. The only way possible to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% to find income earners. The tax code literally forced huge salary 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 developed 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 Online Income Tax Return India earner leaves the country for investments in China and the EU at the expense with the US financial system. Consumption tax polices beginning globe 1980s produced a massive increase in the 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 among 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 on the capital gains rate which reduces annually based upon the length of time capital is invested variety of forms can be reduced to a couple of pages.