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 snack bars. Tax credits while those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or Online GST Application Pune Maharashtra daughter deduction the max of three children. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing everything. The cost at work is simply 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 driven. 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 All investment in stocks and bonds ought to deductable merely taxed when money is withdrawn among the investment niches. The stock and bond markets have no equivalent on the real estate’s 1031 pass on. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. The faster GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase owing money there is limited way us states will survive economically with no massive trend of tax gains. The only way possible to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.
Today lots of the freed income from the upper income earner leaves the country for investments in China and the EU in the expense with the US method. Consumption tax polices beginning globe 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and India 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 duty. Except for making up investment profits which are taxed at capital gains rate which reduces annually based using a length of time capital is invested the number of forms can be reduced using a couple of pages.