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 attributes. Tax credits because those for race horses benefit the few in the expense for this many.

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

Reduce the youngster deduction in order to some max of three small. The country is full, encouraging large families is get.

Keep the deduction of home mortgage interest. Buying a home 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 education loans. It is advantageous for federal government to encourage education.

Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing goods. The cost of employment is in part the repair off ones nicely.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s salary tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds always be deductable in support taxed when money is withdrawn using the investment niches. The stock and bond markets have no equivalent into the real estate’s 1031 give eachother. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to be used for further investment.

(Notes)

GDP and Taxes. Taxes can only be levied being a percentage of GDP. Quicker GDP grows the greater the government’s ability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase owing money there does not way the usa will survive economically without a massive trend of tax gains. The only way possible to increase taxes end up being encourage a massive increase in GDP.

Encouraging Domestic Investment. During the 1950-60s tax rates approached 90% to find 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 come up with the tax revenue from the very center class far offset the deductions by high income earners.

Today lots of the freed income from the upper income earner has left the country for investments in China and the EU at the expense with the US financial system. Consumption tax polices beginning in the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and Online ITR Filing India blighting the manufacturing sector from the US and reducing the tax base at an occasion when debt and an aging population requires greater tax revenues.

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