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 credits. Tax credits while those for race horses benefit the few at the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, GST Registration online pune Maharashtra a rural area will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for expenses and interest on so to speak .. 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 materials. The cost of training is partially the maintenance of ones nicely.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s salary tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds ought to deductable only taxed when money is withdrawn out from the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 exchange. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase owing money there is limited way us states will survive economically with no massive craze of tax profits. The only way possible to increase taxes through using encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to your advantage 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.
Today much of the freed income out of your upper income earner leaves the country for investments in China and the EU at the expense of this 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 excessively manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector of 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 in taxes. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based upon the length of capital is invested the number of forms can be reduced together with a couple of pages.