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 attributes. Tax credits pertaining to instance those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three of their own kids. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Proudly owning 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 the construction industry.
Allow deductions for education costs and interest on student loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the associated with producing goods. The cost of employment is partly the repair of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s earnings tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 industry exemption adds stability to your real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can simply be levied being a percentage of GDP. The faster GDP grows the more government’s ability to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase owing money there is very little way the states will survive economically any massive craze of tax revenues. The only possible way to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% for top level income earners. The tax code literally forced comfortable 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 dual impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper income earner leaves the country for investments in China and the EU at the expense of this US method. Consumption tax polices beginning inside the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and india tax return Online blighting the manufacturing sector from the US and reducing the tax base at a period of time when debt and an aging 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 upon the length of time capital is invested quantity of forms can be reduced any couple of pages.
