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

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

Reduce a child deduction to a max of three children. The country is full, encouraging large families is successfully 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 uk 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 the government to encourage education.

Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing solutions. The cost of employment is mainly the maintenance of ones nicely.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for 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 All investment in stocks and bonds ought to deductable merely taxed when money is withdrawn among the investment market. The stock and bond markets have no equivalent on the real estate’s 1031 flow. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to use for further investment.

(Notes)

GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. Quicker GDP grows the greater the government’s option to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase with debt there does not way the states will survive economically your massive take up tax revenues. The only way possible to increase taxes would be to encourage a massive increase in GDP.

Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% to your advantage 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 dual impact of accelerating GDP while providing jobs for the growing middle class. As jobs were developed the tax revenue from the middle class far offset the deductions by high income earners.

Today plenty of the freed efile Income Tax India contrary to the upper income earner has left the country for investments in China and the EU in the expense for the US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase inside of 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 of the US and reducing the tax base at an occasion when debt and an ageing population requires greater tax revenues.

The changes above significantly simplify personal income in taxes. Except for accounting for investment profits which are taxed at a capital gains rate which reduces annually based using a length of energy capital is invested quantity of forms can be reduced using a couple of pages.