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 loans. Tax credits such as those for race horses benefit the few in the expense of the many.

Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?

Reduce the youngster deduction the max of three the children. The country is full, encouraging large families is pass.

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

Allow deductions for expenses and interest on figuratively speaking. It pays to for federal government to encourage education.

Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing wares. The cost of training 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 to the 1980s the income 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 All investment Online ITR Filing in India stocks and bonds always be deductable and only taxed when money is withdrawn from the investment markets. The stock and bond markets have no equivalent into the real estate’s 1031 flow. The 1031 industry exemption adds stability to your real estate market allowing accumulated equity to be utilized for further investment.

(Notes)

GDP and Taxes. Taxes can essentially levied as being a percentage of GDP. The faster GDP grows the more government’s capability to tax. More efficient stagnate economy and the exporting of jobs coupled with the massive increase in the red there does not way the us will survive economically without a massive trend of tax revenues. The only way possible to increase taxes is to encourage an enormous increase in GDP.

Encouraging Domestic Investment. Your 1950-60s tax rates approached 90% for top level 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 created the tax revenue from the middle class far offset the deductions by high income earners.

Today via a tunnel the freed income around the upper income earner has left the country for investments in China and the EU in the expense of the US current economic crisis. Consumption tax polices beginning planet 1980s produced a massive increase planet 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 from the US and reducing the tax base at a time 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 on the capital gains rate which reduces annually based on the length of your capital is invested amount of forms can be reduced any couple of pages.