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 at the expense belonging to the many.

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

Reduce the youngster deduction in order to some 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. In the event the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of market industry.

Allow deductions for expenses and interest on student loans. It pays to for brand new to encourage education.

Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing everything. The cost on the job is simply the repair 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 focused. 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 All investment in stocks and bonds in order to deductable and only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent into the real estate’s 1031 pass on. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to be taken for further investment.

(Notes)

GDP and Taxes. Taxes can be levied for a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. Within the stagnate economy and the exporting of jobs along with the massive increase owing money there is no way united states will survive economically with massive increase in tax revenues. The only possible way to increase taxes end up being encourage a massive increase in GDP.

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

Today almost all of the freed income contrary to the upper income earner leaves the country for investments in China and the EU at the expense of the US economic state. Consumption tax polices beginning inside the 1980s produced a massive increase a 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 Online ITR Return File India blighting the manufacturing sector among 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 place a burden on. Except for comprising investment profits which are taxed at capital gains rate which reduces annually based using a length of energy capital is invested the amount of forms can be reduced any couple of pages.