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 such as those for race horses benefit the few in the expense belonging to the many.

Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?

Reduce a kid deduction together with a max of three of their own kids. The country is full, encouraging large families is pass.

Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the uk will see another round of foreclosures and interrupt the recovery of market industry.

Allow deductions for educational costs and interest on student loan. It pays to for the government to encourage education.

Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing everything. The cost at work is mainly the repair of ones health.

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 oriented. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds in order to deductable only taxed when money is withdrawn over investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 exchange. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.

(Notes)

GDP and Taxes. Taxes can only be levied as a percentage of GDP. The faster GDP grows the more government’s chance to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there is very little way united states will survive economically with no massive craze of tax revenues. The only way you can to increase taxes is encourage a tremendous increase in GDP.

Encouraging Domestic Investment. The actual 1950-60s income 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 twin impact of growing GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.

Today via a tunnel the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense for the US financial system. Consumption tax polices beginning planet 1980s produced a massive increase a 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 in the US and Online gst registration pune maharashtra reducing the tax base at a time full when debt and an ageing population requires greater tax revenues.

The changes above significantly simplify personal income place a burden on. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based upon the length of time capital is invested the amount of forms can be reduced any couple of pages.