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. efile Tax Return India credits pertaining to instance those for race horses benefit the few at 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 the children. The country is full, encouraging large families is overlook.

Keep the deduction of home mortgage interest. Proudly owning 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 the construction industry.

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

Allow 100% deduction of medical costs and health insurance. In business one deducts the cost of producing solutions. The cost of training is simply the maintenance of ones very well being.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s the income tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading friends. 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 trading. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be utilized for further investment.

(Notes)

GDP and Taxes. Taxes can only be levied as the percentage of GDP. The faster GDP grows the more government’s option to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase with debt there is limited way the states will survive economically your massive increase in tax earnings. The only possible way to increase taxes would be to encourage a massive increase in GDP.

Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% for the top income earners. The tax code literally forced high income 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 came up with tax revenue from the very 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 for the US financial system. Consumption tax polices beginning planet 1980s produced a massive increase a 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 from the US and reducing the tax base at a period when debt and a maturing population requires greater tax revenues.

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