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. Tax credits because those for race horses benefit the few at the expense for this many.

Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another’s favorite charity?

Reduce your son or daughter deduction to be able to max of three children. The country is full, encouraging large families is carry.

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, the country will see another round of foreclosures and interrupt the recovery of durable industry.

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

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

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 All investment in stocks and bonds should be deductable in support taxed when money is withdrawn over investment niches.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

(Notes)

GDP and Taxes. Taxes can be levied for a percentage of GDP. Quicker GDP grows the more government’s option to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in the red there is limited way united states will survive economically any massive take up tax gains. The only way possible to increase taxes is encourage huge increase in GDP.

Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% for top level income earners. The tax code literally forced huge salary earners to “Invest in America”. Such policies of deductions for pre paid interest, File GSTR 3b Online funding limited partnerships and other investments against earned income had the dual impact of growing 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 lots of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense among the US economy. Consumption tax polices beginning planet 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 in the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.

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