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 credit. Tax credits such as those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to be able to max of three the children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for Online GST Registration Pune education costs and interest on student loan. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing goods. The cost of employment is in part the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 friends. 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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can be levied as being a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there does not way the us will survive economically without a massive take up tax profits. The only possible way to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% to find income earners. The tax code literally forced high income 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 accelerating GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the very center class far offset the deductions by high income earners.
Today lots of the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense among the US current economic crisis. Consumption tax polices beginning globe 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were more often than not 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 period when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed at capital gains rate which reduces annually based on the length of your capital is invested variety of forms can be reduced any couple of pages.