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 while those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to a max of three younger children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. If the 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 expenses and interest on so to speak .. It is effective for federal government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing wares. The cost on the job 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 for the 1980s revenue 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 All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn among the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 trading. The 1031 marketplace exemption adds stability for the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can be levied as the percentage of GDP. Quicker GDP grows the greater the government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in the red there is very little way the us will survive economically without a massive increase in tax gains. The only way you can to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% for top income earners. The tax code literally forced huge salary 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the middle class far offset the deductions by high income earners.
Today plenty of the freed income contrary to the upper income earner leaves the country for investments in China and the EU in the expense of this US economy. Consumption tax polices beginning inside the 1980s produced a massive increase inside e file of Income Tax Return in India the 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 belonging to 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 accounting for investment profits which are taxed from a capital gains rate which reduces annually based with a length associated with your capital is invested the amount of forms can be reduced using a couple of pages.