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 credits. Tax credits with regard to example those for race horses benefit the few in the expense among the many.

Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?

Reduce a kid deduction the 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. In case 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 figuratively speaking. It is effective for brand new to encourage education.

Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing everything. The cost on the job is simply the repair off 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 driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. 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in stocks and bonds Online GST Registration in Pune Maharashtra order to be deductable only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 pass on. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to be used for further investment.

(Notes)

GDP and Taxes. Taxes can only be levied as being a percentage of GDP. The faster GDP grows the more government’s capacity to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase with debt there is no way the states will survive economically any massive craze of tax gains. The only possible way to increase taxes is to encourage huge increase in GDP.

Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% for top level income earners. The tax code literally forced financial security 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 skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.

Today almost all of the freed income contrary to the upper income earner has left the country for investments in China and the EU at the expense of this US financial system. Consumption tax polices beginning planet 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were too often 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 a maturing population requires greater tax revenues.

The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based on the length of energy capital is invested quantity of forms can be reduced together with a couple of pages.