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 on 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 small. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for education costs and interest on figuratively speaking. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing everything. The cost of employment is partly the repair off ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent for the real estate’s 1031 flow. The 1031 property exemption adds stability into the real estate market allowing accumulated equity to be used for further investment.
(Notes)
GDP and Taxes. Taxes can be levied being a percentage of GDP. The faster GDP grows the greater the government’s ability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there isn’t really way us states will survive economically with massive increase in tax proceeds. The only possible way to increase taxes is encourage an enormous increase in GDP.
Encouraging Domestic Investment. Within 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 came up with tax revenue from the guts class far offset the deductions by high income earners.
Today much of the freed income off the upper income earner has left the country for investments in China and the EU in the expense of the US financial system. Consumption tax polices beginning regarding 1980s produced a massive increase planet 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 of 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 Online Income Tax Return Filing India duty. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based with a length of your capital is invested amount of forms can be reduced any couple of pages.