Taxation’s to Encourage Investment
Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax credits. Tax credits because those for race horses benefit the few at the expense belonging to the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce the child deduction the max of three small. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of durable industry.
Allow deductions for educational costs and interest on figuratively speaking. 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 of training is in part the upkeep of ones very well being.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s earnings tax code was investment oriented. Today Online IT Return Filing India 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 All investment in stocks and bonds always be deductable in support taxed when money is withdrawn from the investment areas. The stock and bond markets have no equivalent towards the real estate’s 1031 flow. The 1031 marketplace exemption adds stability into the real estate market allowing accumulated equity to be taken for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as the percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase with debt there isn’t really way the states will survive economically without a massive craze of tax proceeds. The only possible way to increase taxes end up being encourage huge increase in GDP.
Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for top level 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 twin impact of growing GDP while providing jobs for the growing middle-class. As jobs were came up with tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income off the upper income earner leaves the country for investments in China and the EU at the expense with the US economic state. Consumption tax polices beginning inside the 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were constantly 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 time full when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based using a length of energy capital is invested quantity of forms can be reduced to a couple of pages.
