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

Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?

Reduce your son or daughter deduction in order to some 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. If the mortgage deduction is eliminated, Online Gst Registration Pune as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of market industry.

Allow deductions for education costs and interest on student loans. It is advantageous for the government to encourage education.

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

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 driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds in order to be deductable in support taxed when money is withdrawn using the investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability on the real estate market allowing accumulated equity to be taken for further investment.

(Notes)

GDP and Taxes. Taxes can fundamentally be levied for a percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in the red there isn’t really way the states will survive economically with no massive development of tax earnings. The only possible way to increase taxes would be to encourage a tremendous increase in GDP.

Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for the top 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 developed the tax revenue from the middle 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 at the expense among the US economic state. Consumption tax polices beginning in the 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a time when debt and an aging population requires greater tax revenues.

The changes above significantly simplify personal income duty. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based around the length of your capital is invested amount of forms can be reduced using a couple of pages.