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 while those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction together with a max of three 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. In case the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for educational costs and interest on student education loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance plan. In business one deducts the associated with producing everything. The cost at work is mainly the repair of 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 driven. 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn over investment market. The stock and bond markets have no equivalent towards the real estate’s 1031 exchange. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied as the percentage of GDP. Quicker GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way the us will survive economically any massive craze of tax gains. The only possible way to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for the top income earners. The tax code literally forced financial security earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned income had the twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were developed the tax revenue from the guts class far offset the deductions by high income earners.
Today much of the freed income out of your upper income earner has left the country for investments in China and the EU at the expense with the US economy. Consumption tax polices beginning inside the 1980s produced a massive increase a demand for brand name items. Unfortunately those high luxury goods were excessively manufactured off shore. Today capital is fleeing to China and Online GST Return India blighting the manufacturing sector in 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 duty. Except for comprising investment profits which are taxed in a very capital gains rate which reduces annually based with a length associated with your capital is invested the amount of forms can be reduced using a couple of pages.
