Primary Principle – Taxes should be used primarily to fund government operations and File GSTR 3b Online 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 loans. Tax credits because those for race horses benefit the few in the expense of the many.

Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?

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

Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of structure industry.

Allow deductions for education costs and interest on so to speak .. It is advantageous for federal government to encourage education.

Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing materials. The cost at work is mainly the maintenance of ones health.

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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn using the investment niches.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

(Notes)

GDP and Taxes. Taxes can essentially levied as the percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase with debt there is no way the us will survive economically with no massive craze of tax earnings. The only possible way to increase taxes would be to encourage huge increase in GDP.

Encouraging Domestic Investment. Within 1950-60s 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 dual impact of accelerating GDP while providing jobs for the growing middle-class. As jobs were created the tax revenue from the center class far offset the deductions by high income earners.

Today via a tunnel the freed income off the upper income earner leaves the country for investments in China and the EU at the expense among the US financial system. Consumption tax polices beginning in the 1980s produced a massive increase in the 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 tax bill. Except for accounting for investment profits which are taxed from a capital gains rate which reduces annually based on the length of time capital is invested amount of forms can be reduced to a couple of pages.