Income tax 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 such as those for race horses benefit the few at the expense among the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the child deduction to be able to max of three the children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Home ownership strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for expenses and interest on student loans. It is advantageous for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the price producing wares. The cost of employment is in part the repair off ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior for the 1980s revenue Online Tax Return Filing India code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds should be deductable just taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent towards the real estate’s 1031 exchange. The 1031 marketplace exemption adds stability to the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can fundamentally be levied as the percentage of GDP. Quicker GDP grows the more government’s capacity to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in the red there is no way the states will survive economically without a massive take up tax earnings. The only way you can to increase taxes is to encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to your advantage income earners. The tax code literally forced great living 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 come up with the tax revenue from the very center class far offset the deductions by high income earners.
Today lots of the freed income out of your upper income earner leaves the country for investments in China and the EU at the expense with the US method. Consumption tax polices beginning inside the 1980s produced a massive increase in the 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 of 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 making up investment profits which are taxed from a capital gains rate which reduces annually based on the length of time capital is invested quantity of forms can be reduced along with couple of pages.
