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 credit. Tax credits while those for race horses benefit the few at the expense of the many.

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

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

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

Allow deductions for expenses and interest on student education loans. It pays to for federal government to encourage education.

Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing everything. The cost at work is partly the repair off ones health.

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 All investment in stocks and bonds in order to deductable just taxed when money is withdrawn over investment market.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

(Notes)

GDP and Taxes. Taxes can only be levied as a percentage of GDP. Quicker GDP grows the more government’s capacity to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there isn’t really way the us will survive economically without a massive take up tax proceeds. The only possible way to increase taxes is to encourage a tremendous increase in GDP.

Encouraging Domestic Investment. Your 1950-60s income 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, 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 middle class far offset the deductions by high online income tax return filing india earners.

Today lots of the freed income around the upper income earner has left the country for investments in China and the EU at the expense among the US method. Consumption tax polices beginning inside the 1980s produced a massive increase regarding 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 in the US and reducing the tax base at a period of time 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 from a capital gains rate which reduces annually based around the length associated with your capital is invested the amount of forms can be reduced using a couple of pages.