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 credit. Tax credits such as those for race horses benefit the few at the expense of the many.

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

Reduce a child deduction to a max of three small. The country is full, encouraging large families is overlook.

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 uk will see another round of foreclosures and interrupt the recovery of the construction industry.

Allow deductions for educational costs and interest on figuratively speaking. It is advantageous for brand new to encourage education.

Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing wares. The cost of training is in part the maintenance of ones nicely.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s the income tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading 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in stocks and GST Registration online Mumbai Maharashtra bonds in order to deductable in support taxed when money is withdrawn from the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 trading. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to supply for further investment.

(Notes)

GDP and Taxes. Taxes can simply be levied as a percentage of GDP. The faster GDP grows the more government’s capability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in difficulty there isn’t really way the usa will survive economically with massive take up tax revenues. The only way possible to increase taxes through using encourage huge increase in GDP.

Encouraging Domestic Investment. During the 1950-60s income tax rates approached 90% for the 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 twin impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.

Today plenty of the freed income from the upper income earner leaves the country for investments in China and the EU at the expense of the US method. Consumption tax polices beginning planet 1980s produced a massive increase a 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 belonging to the US and reducing the tax base at a period 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 a capital gains rate which reduces annually based around the length associated with your capital is invested amount of forms can be reduced using a couple of pages.