Income taxes to Encourage Investment

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 in the expense for this many.

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

Reduce a child deduction to a max of three small. The country is full, encouraging large families is pass.

Keep the deduction of home mortgage interest. Buying strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of layout industry.

Allow deductions for education costs and interest on student loan. It is effective for brand new to encourage education.

Allow 100% deduction of medical costs and insurance policy. In business one deducts the cost of producing wares. The cost at work is in part the repair of ones very well being.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s earnings tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading spouse. The stagnating economy and the ballooning trade deficit are symptoms of consumption tax policies.

Eliminate 401K and IRA programs. All investment in stocks and File GSTR 1 Online bonds should be deductable just taxed when money is withdrawn among the investment advertises. The stock and bond markets have no equivalent on the real estate’s 1031 pass on. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to supply for further investment.

(Notes)

GDP and Taxes. Taxes can fundamentally be levied as being a percentage of GDP. The faster GDP grows the more government’s chance to tax. Due to the stagnate economy and the exporting of jobs coupled with the massive increase in the red there isn’t really way us states will survive economically with massive increase in tax profits. The only possible way to increase taxes end up being encourage a massive increase in GDP.

Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for top income earners. The tax code literally forced huge salary 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 accelerating 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 lots of the freed income out of your 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 regarding 1980s produced a massive increase regarding demand for brand name items. Unfortunately those high luxury goods were too often 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 an occasion when debt and a maturing population requires greater tax revenues.

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