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 snack bars. Tax credits with regard to example those for race horses benefit the few in the expense belonging to the many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction together with a max of three of their own kids. The country is full, encouraging large families is overlook.
Keep the deduction of home mortgage interest. Buying a home 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 durable industry.
Allow deductions for expenses and interest on figuratively speaking. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing goods. The cost at work is in part the maintenance of ones fitness.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds should be deductable and only taxed when money is withdrawn among the investment areas. The stock and bond markets have no equivalent to the real estate’s 1031 flow. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.
GDP and Taxes. Taxes can fundamentally be levied being a percentage of GDP. Quicker GDP grows the greater the government’s ability to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in the red there is limited way us states will survive economically without a massive increase in tax proceeds. The only way possible to increase taxes through using encourage huge increase in GDP.
Encouraging Domestic Investment. The actual 1950-60s tax rates approached 90% for top 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 twin impact of growing 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 Online Income Tax Return India earners.
Today lots of the freed income from the upper income earner leaves the country for investments in China and the EU at the expense among the US current economic crisis. Consumption tax polices beginning in the 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were frequently 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 time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed in a very capital gains rate which reduces annually based around the length of capital is invested quantity of forms can be reduced along with couple of pages.