Income taxes 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 attributes. Tax credits with regard to example those for race horses benefit the few at the expense on the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another’s favorite charity?
Reduce a kid deduction to be able to max of three children. The country is full, encouraging large families is pass.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If your mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of market 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 coverage. In business one deducts the cost of producing everything. The cost on the job is simply the upkeep of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s earnings tax code was investment oriented. Today it is consumption focused. 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 All investment in stocks and bonds ought to deductable in support taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 pass on. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. Quicker 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 states will survive economically with massive take up tax profits. The only possible way to increase taxes is to encourage a tremendous increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s taxes rates approached 90% to your advantage online income tax return india 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 skyrocketing GDP while providing jobs for the growing middle class. As jobs were developed the tax revenue from the very center class far offset the deductions by high income earners.
Today via a tunnel the freed income from the upper income earner has left the country for investments in China and the EU in the expense for the US method. 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 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 duty. Except for making up investment profits which are taxed on the capital gains rate which reduces annually based using a length of capital is invested amount of forms can be reduced to a couple of pages.
