Income tax 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 snack bars. Tax credits such as those for race horses benefit the few in the expense of the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Owning a home 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 Online GST Return Filing interrupt the recovery of durable industry.
Allow deductions for education costs and interest on student education loans. It pays to for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the associated with producing wares. The cost at work is partially the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on 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 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 All investment in stocks and bonds in order to be deductable and only taxed when money is withdrawn out from the investment niches. The stock and bond markets have no equivalent for the real estate’s 1031 give eachother. The 1031 property exemption adds stability to your real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. The faster GDP grows the more government’s capacity to tax. Given the stagnate economy and the exporting of jobs along with the massive increase owing money there is limited way the usa will survive economically without a massive development of tax earnings. The only possible way to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to find 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 growing GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the very center class far offset the deductions by high income earners.
Today almost all of the freed income off the upper income earner has left the country for investments in China and the EU at the expense among the US economy. Consumption tax polices beginning globe 1980s produced a massive increase in the 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 an occasion when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for making up investment profits which are taxed at capital gains rate which reduces annually based using a length associated with your capital is invested variety of forms can be reduced using a couple of pages.
