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 while those for race horses benefit the few in the expense on the many.

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

Reduce your son or daughter deduction in order to some max of three of their own kids. 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. In case 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 expenses and interest on so to speak .. It is advantageous for brand new to encourage education.

Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing goods. The cost of labor is partly the upkeep of ones health.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior into the 1980s the income tax code was investment oriented. Today it is consumption concentrated. 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 All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to be utilized for Online GST Mumbai Maharashtra further investment.

(Notes)

GDP and Taxes. Taxes can be levied as the percentage of GDP. The faster GDP grows the greater the government’s capacity to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in the red there is no way the usa will survive economically your massive craze of tax proceeds. The only way you can to increase taxes is encourage a tremendous increase in GDP.

Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% to find income earners. The tax code literally forced comfortable 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 growing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the guts class far offset the deductions by high income earners.

Today lots of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense of this US economy. Consumption tax polices beginning globe 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were excessively 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 time when debt and a maturing population requires greater tax revenues.

The changes above significantly simplify personal income duty. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based on the length associated with your capital is invested quantity of forms can be reduced together with a couple of pages.