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 at the expense of the many.

Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?

Reduce your son or daughter deduction to a max of three children. The country is full, encouraging large families is successfully pass.

Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In the event 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 education costs and interest on figuratively speaking. It is advantageous for federal government to encourage education.

Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing everything. The cost at work is simply the repair off ones fitness.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to 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 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 property exemption adds stability for the real estate market allowing accumulated equity to be taken for further investment.

(Notes)

GDP and Taxes. Taxes can simply be levied for 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 in debt there isn’t really way the us will survive economically your massive trend of tax revenues. The only way you can to increase taxes is encourage a tremendous increase in GDP.

Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% for File GSTR 3b Online the top income earners. The tax code literally forced great 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 skyrocketing GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the middle class far offset the deductions by high income earners.

Today almost all of the freed income around the upper income earner has left the country for investments in China and the EU in the expense among the US economy. Consumption tax polices beginning inside the 1980s produced a massive increase regarding 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 comprising investment profits which are taxed at a capital gains rate which reduces annually based upon the length of energy capital is invested variety of forms can be reduced using a couple of pages.