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 of the many.
Eliminate deductions of charitable contributions. Why should one tax payer subsidize another’s favorite charity?
Reduce your son or daughter deduction in order to some max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Proudly owning strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for education costs and interest on so to speak .. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing everything. The cost of employment is partly the repair of ones nicely.
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 concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading partners. 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 All investment in stocks and bonds in order to be deductable merely taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 exchange. The 1031 real estate exemption adds stability to the real estate market allowing accumulated equity to supply for further investment.
(Notes)
GDP and Taxes. Taxes can be levied being a percentage of GDP. The faster GDP grows the greater the government’s capability to tax. Due to the stagnate economy and the exporting of jobs along with the massive increase in debt there is no way the states will survive economically with no massive take up tax profits. The only way possible to increase taxes end up being encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s tax rates approached 90% to find income earners. The tax code literally forced comfortable 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 come up with the tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income from the upper income earner leaves the country for investments in China and the EU online Gst registration in Mumbai maharashtra the expense of the US economic state. Consumption tax polices beginning planet 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 when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for comprising investment profits which are taxed from a capital gains rate which reduces annually based around the length of time capital is invested quantity of forms can be reduced any couple of pages.
