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 snack bars. Tax credits pertaining to instance those for race horses benefit the few in the expense belonging to the many.

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

Reduce your son or daughter deduction to be able to max of three of their own kids. The country is full, encouraging large families is pass.

Keep the deduction of home mortgage interest. Buying 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 market industry.

Allow deductions for educational costs and interest on student education loans. It is effective for brand new to encourage education.

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

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 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 All investment in stocks and bonds should be deductable and only taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 marketplace exemption adds stability to your real estate market allowing accumulated equity to use for further investment.

(Notes)

GDP and Taxes. Taxes can essentially levied for a percentage of GDP. The faster GDP grows the more government’s chance to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in debt there isn’t really way the usa will survive economically with massive craze of tax gains. The only way you can to increase taxes would be to encourage huge increase in GDP.

Encouraging Domestic Investment. Your 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced great 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 dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.

Today via a tunnel the freed income out of your upper Online Income Tax Filing India earner leaves the country for investments in China and the EU in the expense among the US current economic crisis. Consumption tax polices beginning regarding 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 among the US and reducing the tax base at a period when debt and an aging population requires greater tax revenues.

The changes above significantly simplify personal income in taxes. Except for making up investment profits which are taxed at a capital gains rate which reduces annually based with a length of time capital is invested the number of forms can be reduced along with couple of pages.

Fees to Encourage Investment

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