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 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 the max of three younger children. The country is full, encouraging large families is carry.

Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If 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 education costs and interest on so to speak .. It is advantageous for federal government to encourage education.

Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing wares. The cost on the job is partly the maintenance of ones fitness.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. 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 All investment in stocks and bonds always be deductable merely taxed when money is withdrawn from the investment markets.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 further investment.

(Notes)

GDP and Taxes. Taxes can essentially levied for a percentage of GDP. The faster GDP grows the more government’s ability to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there does not way the us will survive economically any massive take up tax earnings. The only way you can to increase taxes end up being encourage huge increase Online GST registration in Mumbai Maharashtra GDP.

Encouraging Domestic Investment. The actual 1950-60s income tax rates approached 90% for the top income earners. The tax code literally forced financial security 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 came up with tax revenue from the guts class far offset the deductions by high income earners.

Today much of the freed income contrary to the upper income earner has left the country for investments in China and the EU in the expense with the US method. Consumption tax polices beginning in the 1980s produced a massive increase planet 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 period when debt and a maturing population requires greater tax revenues.

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