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 snack bars. Tax credits while those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a child deduction to be able to max of three of their own kids. The country is full, encouraging large families is successfully pass.
Keep the deduction of home mortgage interest. Home ownership 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 structure industry.
Allow deductions for education costs and interest on student loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing everything. The cost on the job is in part 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 into 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 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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn out from the investment niches.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 into the real estate market allowing accumulated equity to be taken for further investment.
GDP and File GSTR 3B Online Taxes. Taxes can fundamentally be levied for a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in debt there isn’t really way the states will survive economically any massive take up tax proceeds. The only way you can to increase taxes is encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% to find 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 accelerating 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 plenty of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense of the US current economic crisis. Consumption tax polices beginning regarding 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were constantly 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 time full when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed at capital gains rate which reduces annually based on the length of time capital is invested amount of forms can be reduced to a couple of pages.